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10/9/18
Thomas Thornton
Top Overnight News

  • S&P futures down 0.4% after US equities put in a mixed performance in choppy, but uneventful trading on Monday. Asian markets mostly weaker overnight with Japan down over 1% (now down 4% after recent upside DeMark exhaustion signal) . European markets lower. Treasuries mostly weaker after the cash market was closed for the Columbus Day holiday in the US. Curve bear steepening. Dollar firmer vs euro and sterling, but lagging again on euro cross. Gold up 0.1%. WTI crude up 0.7% with large hurricane in Gulf (19% of production is down).
  • Risk-off theme in focus, though no specific driver. Press continues to focus on elevated tensions between US and China. FT said Trump won’t talk to Xi at G20 meeting next month without a detailed list of concessions from China. Also some lingering attention on the fiery speech late last week from Vice President Pence (which was overshadowed by the Kavanaugh drama). Still no sign of national team support in China stocks and PBOC continued to drain liquidity.
  • Outside of US-China tensions, Italy budget another overhang on sentiment with looming showdown between Rome and Brussels. Finance Minister Tria said budget aimed at addressing concerns of citizens and reiterated 2.4% deficit target for 2019. IMF cut its global growth forecast for the first time in 2 years (now 3.7% from 3.9%, blamed Emerging Market weakness and tariffs. NFIB small business index slipped from record high last month, but still elevated and indicative of ongoing post-election animal spirits.
  • PPG negatively preannounced and highlighted a number of issues that have received attention in Q3 earnings previews, including input price pressure and FX headwinds (this is my big October theme of lowered guidance). WSJ reported Trian has expressed interest in acquiring Papa John's Pizza. Added that other companies and PE firms also interested. CNBC discussed how some companies are moving advertising to Amazon from Google.
  • "Lots of new lows" for stocks overnight; both the German DAX and UK’s FTSE are at 6 month lows, the MSCI Asia Pac Index is down for a 7th straight session to a 15 month low, and MSCI Emerging Market Index is at 17 month lows.
  • Tech sector continues to feel the most pain, as it lagged the broader S&P by 1.1% yesterday (and is now -3.9% over the last 5 sessions).  And the NYSE FANG index is -6% over the last 3 sessions.
  • The S&P’s 50 day moving average is worth watching (2978) as both yesterday/Friday the Index bounced from session lows to close above that level (and is set to open below it given pre-open futures levels).  
  • US yields again in focus as the US 10 Yr has made a fresh 7 year high (3.259%).  And the curve continues to steepen with the 2/10 spread at 36 bps vs. only 23 bps a week ago.

  • Sign up for tomorrow's Hedge Fund Telemetry Daily Note Live Webinar here.  It starts at 10:15 am EST and a replay will be available

Market Snapshot
US Economic Reports For The Rest Of The Week
Pre Market Movers



 


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Occasionally, an earnings report date could change, or could be incorrect. We rely on various sources including Street Account, Factset, and Bloomberg to compile this report.    

 

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