Good morning. U.S. futures are slightly higher today, but political risk hangs over the markets with the Democrats determined to push President Trump out of office before next week’s Biden inauguration, setting up an impeachment vote for tomorrow.

Meanwhile, Corporate America is dead set on holding President Trump and his allies in Congress accountable for last week’s deadly insurrection at the Capitol. Lest you think that was a one-time event, the FBI is now warning it’s received information for further armed protests on or before Jan. 20.

Let’s see if we can find some more upbeat news as we check in on what’s moving the markets.

Markets update

Asia

• The major Asia indexes are broadly higher in afternoon trading with the Shanghai Composite up 2.2%.
• Taiwanese chip giant TSMC is set to report on Thursday a mammoth bottom-line beat, analysts predict, as contract orders from the likes of Apple continue to pour in.
•  The Nasdaq-listed Chinese video platform Bilibili has filed for a secondary listing in Hong Kong, CNBC reports, as delisting uncertainty hangs over such firms.

Europe

• The European bourses rebounded in early trading with the Stoxx Europe 600 up 0.3% at the open.
• The Eurozone economy is headed for a double-dip recession, analysts at UBS and JPMorgan Chase warn, as lockdown measures drag on.

U.S.

• The U.S. futures are flat, but rising. That’s after all three major exchanges finished in the red with the Nasdaq off 1.3%.
• Tesla and Twitter were the biggest losers yesterday, falling 7.8% and 6.4%, respectively. Facebook too dropped 4%. The latter two were hit by escalating fears of harsher antitrust scrutiny on the social media giants by regulators on both sides of the Atlantic.
• Short the dollar? You may want to rethink that trade, Morgan Stanley warns, citing uncertainty in America’s monetary and fiscal policy, and the rising risk of inflation.

Elsewhere

• Gold is up, trading around $1,860/ounce.
• The dollar is taking a breather from its five-day surge, a good sign for equities.
• Crude is up, with Brent trading around $56/barrel.
• Bitcoin is up 9% in the past 24 hours after a bear market plunge sent it to $30,305. Down 25%, up 9%. Sounds an awful lot like an asset bubble.

***

Turning point

This is just the seventh trading session of the year, and yet there’s enough evidence to say we’ve reached a turning point. That’s the assessment of Morgan Stanley CIO Lisa Shalett who, in an investor note yesterday, says last week’s blue sweep in Georgia will shake up the stock, bond and FX markets for the foreseeable future.

We’ve already seen the Treasury market wake from the dead. The yield on ten-year Treasurys has surged since the Jan. 5 Georgia run-off as the markets price in additional stimulus for COVID-battered businesses and families. Morgan Stanley now forecasts an additional $1 trillion to $1.5 trillion in stimulus goodies between now and the 2022 midterm elections; Goldman Sachs calculates a more modest $750 billion boost.

Whatever the number, another round or two of stimulus makes reflation a much more likely scenario in 2021. More stimulus means more deficit spending and a surge in GDP. Those two forces will lead to rising prices, Shalett points out, and that could put the crimp on investors’ favorite trade of 2020.

“In the stock market, reflation is apt to turbocharge the rotation toward cyclicals and smaller-cap stocks and away from expensive long-duration assets, especially megacap tech stocks,” she writes.

Shalett, of course, is not the first to warn of the great rotation. This has been a narrative since November, but one that has really picked up in the past week since the Georgia vote.

Now, it’s not as if we should expect to see an exodus from tech stocks, as there’s still plenty of growth to be found in the FAAMNG trade. Still, most of these names—Apple, Netflix, Amazon and Microsoft—are down YTD. And, reflation, in general, is a headwind for growth stocks.

So, how to play this? Shalett offers this tip:

“Consider adding cyclicals with valuation support in sectors such as financials, industrials, materials, energy, commodities, infrastructure, transports, consumer durables and consumer discretionary. Use long-duration assets such as expensive megacap tech stocks as a source of funds.”

Maybe that’s why so many investors bailed on Bitcoin over the weekend. Taking those profits off the table and plowing it into value stocks would be a very 2021 move.

***

Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

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

Those were the days. COVID killed an historic expansion of the labor market last year, and it also put a black mark on President Trump's economic record. He will leave the White House with the worst record on jobs since Herbert Hoover. Fortune's Lance Lambert runs the numbers.

Boardroom backlash. Insurrection won't be tolerated by America's CEOs. The number of Fortune 500 companies that have pledged to halt political contributions to Republican lawmakers who sought to disrupt certification last week of President-elect Joe Biden's victory  continues to grow. Fortune's Phil Wahba tallies the names, and outlines the ramifications.

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Market candy

Quote of the day

Not to take anything away from the political importance of it. It's a slim chance, but unless it keeps Democrats from passing another stimulus bill, that’s the only implication we can think of.

That's Wells Fargo Investment Institute's senior global market strategist Sameer Samana speaking to Fortune's Anne Sraders on what a second impeachment of Donald Trump would mean for the stock market.