First Call - Hedge Fund Telemetry

S&P futures up 0.2% following a big selloff in US equities on Thursday. Asian equities mixed overnight. China up over 2.5%, but still ended the week down more than 2%. European markets weaker with Italy a laggard (Italian bond yields also seeing another bout of upward pressure). Treasuries little changed. Dollar firmer vs yen and slightly weaker vs euro. Gold flat. WTI crude up 0.6%, but still on track for a big weekly pullback.
Some moving pieces when it comes to the big macro stories in the market. China data largely disappointed - GDP missed, 6.5% vs. 6.6% estimate and now at the lowest level since 2009. Industrial Production also missed, while Retail Sales were better, but Chinese leaders including the Vice Premier, PBOC officials and banking regulators all issued statements/comments in support of their equity markets. This helping the Shanghai Comp bounce from the 4 year low made yesterday.
Also another flurry of talk about more policy fine-tuning measures in the pipeline.
Italy potentially the next macro "issue" for markets. Italian spreads vs. German debt have hit fresh 5 year highs after recently elected Italian leaders failed to convince EU officials Italy can "spend its way out of crisis. Brussels recently called Rome’s planned budget deviation "unprecedented." When I posted charts this Summer of the Italian 10 year yield upside price objective of 4.05% people couldn't fathom a move up of 125bps
US equities have failed to find any meaningful reprieve from oversold conditions. Key areas of concern continue to revolve around tightening of financial conditions and peak growth (and profit margins).
DWDP hit by $4.6B impairment charge in ag unit. Paypal boosted by progress on Venmo monetization. American Express beat and raised with lower provisions key driver. AIG hit by preannouncement of worse-than-expected Q3 cat losses ISRG beat with focus on 20% procedure growth. TEAM flagged some margin pressure form incremental investments.
81 S&P names have now reported; "only" 65% have beat on the Revenue line (well below Q2 but still likely too early to draw any conclusions).

As a reminder, I'm traveling to Austin for the Formula 1 race and there will not be a Daily Note today. Thus, I posted a couple extra charts I'm watching below.

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