First Call - Hedge Fund Telemetry

S&P futures down 0.23% after US equities finished mostly lower coming out of the long holiday weekend on Tuesday. Asian markets weaker overnight with China back on the defensive, down over 1.5%. European equities lower, though Italy continues to buck the trend. Treasuries firmer across curve. Dollar not doing much overall. Gold up 0.1%. WTI crude down over 1%.
A few headwinds in focus. Trade continues to dominate the headlines ahead of resumption of US-Canada talks on NAFTA overhaul today and potential for US to impose tariffs on next $200B of Chinese imports as soon as tomorrow. Nothing particularly incremental surrounding either situation.
Emerging Markets/contagion fears getting most of the headlines. The MSCI EM Index is lower for a 6th straight session, the South African Rand made fresh 2 year lows (-5.7% in 3 days), the Mexican Peso is -1%, the Turkish Lira is lower for the 7th time in 8 days, and Indonesian stocks had their worst session in 3 years (-3.7%).
A few other macro developments in focus. China Caixin services PMI came in softer than expected, raising more worries about sufficiency of policy fine-tuning measures. However, final Eurozone services PMI in line with flash reading, while UK surprised to the upside and Japan ticked up from prior month. Australian economy grew at fastest pace in six years. Italian bonds have extended recent rally on dampened budget concerns.
WDAY beat on most key metrics, but backlog growth decelerated and analysts highlighted elevated expectations. RH posted better EPS on lower taxes and stronger GM, but revenue missed and company lowered top-line growth outlook. UAL guided Q3 PRASM to high end of range. DAL reiterated guidance. FB and TWTR executives to testify in Washington today.
US yield curve is sharply higher over the last 2 sessions (+4.5 bps for the 2/10 yr spread, biggest 2 day jump in 6 weeks).
S&P was lower for a 3rd straight session after Wednesdays all-time high. Still, the index is only off .6% (18 points) over those 3 sessions.
Really no equity volatility to speak off, as it’s now been over a month since the S&P saw an intraday range of more than 1% (last time was August 2nd when the index saw a 34 points swing).

Going to be have a shorter Daily Note out today and tomorrow as I have website development meetings all day. Hope to see some friends tomorrow at Bloomberg in NYC for the DeMark Seminar. Here is the full Yahoo Finance appearance video from Friday. Skip to 40:00. Lastly, I have a new Trade Idea Video on Real Vision out yesterday.

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