First Call - Hedge Fund Telemetry

S&P futures up 0.25% after index finished lower for a third straight session on Monday. Rotation out of tech the big story, though broader market resilience theme faced some scrutiny. Asian markets narrowly mixed overnight. European markets mostly higher. Treasuries stronger with curve flattening following bearish steepening move last week. Dollar seeing solid gains vs yen, but lagging a bit on euro cross. Gold down 0.15%. WTI crude off 0.5%.

Bank of Japan "tweaked" policy (allowing slightly higher range for its 10 Yr yield, cut inflation estimates). That said, they reiterated rates will stay low for an "extended period of time" = dovish.

Chinese PMI’s light as both Manufacturing (51.2 vs. 51.3 estimate) and Services (54 vs. 54.9) both missed. Tariffs being blamed for miss.

German unemployment inline (and stayed at record lows), while French CPI was better.
S&P now -1.5% from Friday’s highs, biggest 2 day pullback in over a month. That said, volume’s only averaged 6.6B shares over those 2 days (well below the 7.1B YTD average).

The FT reported that PM May has told senior members of her Conservative party that the Labour party could use an ancient parliamentary procedure as a means to stopping the UK leaving the EU without a deal.

Earnings update; 278 S&P names have now reported with 88% beating on the EPS line (well above the 70% long term average). 73% are beating revenue estimates (average is closer to 55%).

AAPL (3.9% S&P weighting) reports tonight, and likely matters more than normal given FB/NFLX/TWTR pain last week. Over the last 5 sessions, the Tech S&P subsector is -3.4% (by far the worst performer, next worst is Consumer Discretionary -1.1%).

Only a 17% chance of a rate hike tomorrow (but 92% chance they raise next month).

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