First Call - Hedge Fund Telemetry

S&P futures up 0.5% after US equities finished mostly lower in lackluster trading on Monday with tech underperforming again. Asian markets mixed overnight. Japan up over 1%, while China continued to underperform. European markets higher with Italy a standout. Treasuries weaker after yields resumed recent push higher in prior session. Dollar firmer vs yen and little changed vs euro. Gold up 0.2%. WTI crude down 0.7%. S&P and NDX bullish sentiment remains very depressed at 11% and 12%.
China PPI rose 3.6% y/y in September following a 4.1% increase in prior month. This was above the 3.5% consensus, but marked third straight month of deceleration.
Very quiet from a headline perspective. Some focus on recent submission of Italian budget to Brussels. Nothing new on US-China tensions, though Treasury report today not expected to name China a currency manipulator and Mattis said not trying to contain China. Still a lot of scrutiny on Saudi Arabia, which reports say may admit journalist Jamal Khashoggi died in a botched investigation.
October BofA Merrill Lynch Global Fund Manager Survey revealed global growth expectations lowest since November 2008 after peaking in January. However, report said not bearish to signal anything other than a short-term bounce in risk assets. Survey flagged 3.7% as the level on the 10-year note that would drive a rotation from equities to bonds. Fed put not seen until 2390 on S&P. Long FAANG+BAT, short Treasuries, long S&P500 the most crowded trades. Contrarian trades include long China, short US, long EM, short FAANG, long industrials, short financials, long REITs and short cash. Trade ware, QT and China slowdown seen as biggest tail risks.
Crude ($71) continues to hover near 4 week lows despite the uncertainty surrounding Saudi Arabia. This morning Secretary of State Pompeo meets w/ Saudi King Salman regarding the death of Khashoggi.
UK PM Theresa May attempted to "walk back" reports yesterday that the UK/EU are headed for a "hard Brexit/no deal". Overnight she said talks w/ the EU have seen "more of a pause than a breakdown".
Investors were content to "watch" yesterday, as the 6.9B traded in the US was the lowest in nearly 3 weeks and inline with the YTD average
Analyst meetings (MRVL and WMT (guided lower), and most important and watched earnings (BLK, CMA, DPZ, FHN, GS, GWW, INFY, JNJ, MS, PLD, and UNH pre-open and ADTN, AMX, BHP, CREE, CSX, IBKR, IBM, LRCX, NFLX, SONC, and UAL after the close).
Story breaking of GS and MS pushing Uber to go public with a... $120 billion valuation.

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