First Call - Hedge Fund Telemetry

S&P futures down 1.3% after US equities finished mostly lower on Monday, unable to hold sustain early gains. Asian markets under pressure overnight with China down 2.25% following a big two-day bounce. European equities have also sold off hard. Treasuries stronger across the curve. Dollar flat. Gold up over 1%. WTI crude off 1.6%. While the S&P will likely make new 4 month lows, much of the globe is faring worse; both Germany and broader Europe (Stoxx 600) at new 22 month lows, while the MSCI Asia Pac Index hit the lowest level in 17 months. However no real "panic" to other assets; the Dollar (DXY) is only marginally higher and remains in a 3 week range, while the US 10 Yr yield (3.15%) is only off 4 bps.
S&P bullish sentiment back to 10% and likely will move lower with later today's reading
Path of least resistance remains lower, though no specific driver. Peak profits still a big area of concern with higher input prices, a stronger dollar and waning tax overhaul tailwind. Also little hope for a near-term US-China trade deal. China slowdown another overhang with recent bout of fine-tuning measures seen as insufficient. Neither Italy nor EU backing down in budget battle as Italy continues to say it will violate EU rules by outspending their budget. Add in still no consensus/agreement on the UK’s plan for Brexit. Geopolitical tensions (Saudi Arabia, Russia) continue to ratchet up. Last night Trump said he will abandon the Nuclear Treaty Reagan and Gorbachev signed 30 years ago because the "geopolitical situation" has changed (China). Turkish President Erdogan said Saudi Arabia planned to murder Khashoggi from the beginning, asked where the body was and called out all the conflicting Saudi statements.
Press reports continue to note that nobody in Washington seems to have any idea what Trump is talking about regarding a 10% tax cut for the middle class. Trump predicted drug prices will soon be plunging.
Most watched earnings this week: CAT/MMM/HOG/PHM/UTX/VZ (This morning), TXN (Tues night), BA/FCX/GD/ITW/T/UPS (Wed morning), AMD/F/MSFT/V/XLNX (Wed night), and AMZN/CY/EXPE/GOOGL/INTC/WDC (Thurs night). So far today CAT, MMM, PHM, VZ down. UTX flat, HOG up 1%

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