First Call - Hedge Fund Telemetry

S&P futures down 0.1%. Asian markets weaker overnight with China down over 1%, hitting worst level since late 2014. Japan closed for holiday. European markets largely on the defensive, though Italy bucking the trend. Treasuries unchanged to slightly weaker with 10-year yields again hitting 3%. Dollar largely on the defensive vs the majors. Gold slightly higher. WTI crude up 0.7%.
Trade the big driver of risk sentiment with Trump administration reportedly set to formally announce next round of tariffs on $200B of Chinese imports early this week. While WSJ said White House will start at a 10% rate (vs the 25% recently envisaged by Trump), China may now decline to participate in new talks that were expected later this month. In addition, some Chinese officials have proposed Beijing retaliates by restricting sale of materials and parts key to US firms.
The "creep" in higher US rates continues, as the 10 Yr yield is "officially" back at 3% (essentially at the highest level in 4 months). And the Us 2 Yr yield higher for the 7th straight session to new 10+ year highs (2.786%).
US stocks continue to outperform global peers; YTD the S&P is +8.6% vs. German -6.5%, the UK -5.2%, Japan +1.4% and China -20%.
Very quiet outside of the trade headlines. Italian budget concerns continue to recede, though still a lot of uncertainty. Brexit headlines have also looked better with latest reports that EU preparing to accept frictionless Irish border. Eurozone final CPI for August unchanged at 2%. China house price growth accelerated to two-year high in August. Flake and Corker have called for delay on Kavanaugh confirmation vote. NY Times said Trump souring on Defense Secretary Mattis.
Not much corporate news. TEVA boosted by FDA approval of Ajovy for migraine prevention. Musk said Tesla has "gone from production hell to delivery logistics hell," but problem should be fixed shortly. MDP announced sale of TIME media brand to Marc and Lynne Benioff for $190M in cash. AMZN investigating employees selling internal data to independent merchants.

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