Good morning. There’s plenty of red on the screens this morning as lockdown fears sweep through Europe. Elsewhere, the banking sector is under fire for bombshell revelations disclosed over the weekend in the “FinCEN files.” It’s a risk-off day.

Let’s check in on the action.

Markets update

Asia

• The major Asia indexes are mostly lower in afternoon trading, with Hong Kong’s Hang Seng leading the way down, off 2%.
• TikTok fans were not shut out of the service overnight as a deal “in concept” involving Walmart, Oracle and Chinese owner ByteDance inches closer. There are a lot of questions and concerns among China hawks, but if the deal gets green-lighted it will be valued at $60 billion. Meanwhile, a federal judge in San Francisco granted WeChat a temporary reprieve.
• HSBC shares in Hong Kong are down 51% on the year, slumping to a 25-year low on Monday. That’s as fears loom the bank will be placed on the “unreliable entity list,” a designation that could make it exceedingly difficult to do business in the region.

Europe

• The European bourses were a blur of red out of the gates with London’s FTSE off more than 3% in early trading on COVID jitters, the worst sell-off since July. Across the continent, banks led shares lower.
• London could reimpose lockdown-like measures—joining Madrid—after the U.K. government announced more than 8,400 new coronavirus cases over the weekend.
• Meanwhile, U.K. house prices are taking off with the biggest gains in values calculated outside the London area, part of a global trend in which prospective homeowners are looking for more space.

U.S.

• U.S. futures are pointing to another bumpy open. (Dow futures were down 600 at one point.) That’s after all three major exchanges fell for a third straight week last week, its worst sell-off since 2019.
• The latest International Consortium of Investigative Journalists report is a doozy for some of the world’s biggest banks. JP Morgan Chase, Bank of New York Mellon and Deutsche Bank, have been implicated in the lucrative practice of moving “large sums of allegedly illicit funds over a period of nearly two decades,” CNBC reports. Some $2 trillion worth of FinCEN flagged transactions were detailed in a report being called the “FINCEN files.”
• Trevor Milton, the tech savvy founder of EV startup Nikola Motor, stepped down as executive chairman this weekend amid a swirling SEC probe prompted by short seller Hindenburg Research. Shares in Nikola have plunged more than 50% since its June high.

Elsewhere

• Gold is down, trading under $1,950/ounce.
• The dollar is up.
• Crude is off, sending Brent below $43/barrel.

***

Rethinking value stocks

It’s been a dizzying stretch for stocks, with the major exchanges all finishing down each of the past three weeks.

Much of that was to be expected as we head into an uncertain election season and as public health officials, educators and businesses map out a cautious strategy to reopen classrooms and office spaces. The resurgence of cases in Europe, which coincides with the back-to-school period, is certainly spooking investors there this morning.

But let’s pause and look at the latest YTD total returns. I pulled the below performance figures from a Goldman Sachs report (with pricing through the close of markets on Sept. 17).

Despite the collapse in tech stocks over the past few weeks, the Nasdaq 100 is still up impressively on the year, outpacing gold, Treasurys and investment-grade credit.

Meanwhile, energy and financials are pulling up the rear.

But let’s try a thought experiment. Let’s assume, as Goldman now forecasts, an effective COVID vaccine will get the green-light for distribution in Q1 next year. Is your portfolio ready for such a breakthrough? Hint: under such a scenario, you can throw out the chart above.

According to Goldman, the driving force of the 2020 market—growth stocks—will suddenly become a less influential one for your portfolios as some level of normalcy returns to the global economy. Instead, Goldman sees value stocks—food, beverages and tobacco, for example—as the sector that best responds to what it calls “vaccine optimism.”

“From a valuation perspective, value stocks generally have short duration cash flows, meaning they will outperform relative to other categories of the market as rates rise,” Goldman writes in a note. That not just true of value stocks, but they are better positioned for this stage of the recovery cycle, as this next Goldman chart shows.

To be sure, the pull-back in tech stocks in recent weeks has more to do with overpriced Nasdaq valuations than it does with any rise in vaccine optimism that might require an eventual portfolio rejiggering.

But, if Goldman is right, the steady march to a vaccine would be worth keeping an eye on if you’re overweight tech these days.

***

Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

The perils of boring. In times of peak volatility, conservative investors prefer trades that seek to minimize losses. That makes sense. But this year some of these trades have really bombed. The Wall Street Journal looks at the puzzling performance of a basket of "safe" ETF trades designed to put a floor under losses. It didn't quite work that way. "Their performance in 2020 has been perverse: Several lost at least as much as the market in February and March, but later lagged far behind when stocks shot up more than 50%," the WSJ reports.

T bills. With lending down and deposits surging, U.S. banks are desperate to eke out a decent return somewhere, anywhere. In a positive sign for the bond market, lenders are increasingly turning to Treasurys, buying some $250 billion worth since February. 

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

Quiz time

A saver walks into an American bank (bear with me on this one) and opens up a savings account. What's the average interest-earnings she can expect to collect on deposits of $1,000?

• A) Nothing
• B) 10 bucks
• C) 1 buck
• D) 50 cents

The answer is D, a measly half-dollar. According to the FDIC, the average interest rate on deposits is 0.05%, meaning, if the rate stays steady, our saver would collect $0.50 in interest on deposits of $1,000. “It’s almost an insult,” Cheryl Costa, a wealth manager, tells the New York Times. In parts of Europe, the land of negative rates, it's even worse.