First Call - Hedge Fund Telemetry

S&P futures down 1% and Nasdaq 100 futures down 2% weighing on both Asian and European equity markets. "Risk off" pushing the US 10 Yr yield down to 3.07% (fresh 3 week lows), while oil is back is back to $66.46 (4th straight session below its 200 moving average, first time that’s happened since Sept ’17). And the dollar within a few cents of new 15 month highs.
Yuan continues weaker but still above 7 vs USD. Gold up 0.5% on safe-haven buying. WTI crude down over 1.3% despite reports OPEC considering a return to production cuts (and China refraining from purchasing Iranian crude).
Risk off theme back in focus with tech under scrutiny following revenue misses from Amazon and Alphabet. While Street has been quick to defend the names (which also gets to the issue of crowded trades), plays into peak growth concern narrative that has been fairly prevalent this earnings season despite solid broader market metrics, steady out-year expectations and fairly upbeat macro commentary on corporate conference calls.
Despite Trump’s Fed comments earlier this week, Fed Vice Chair Clarida said "further gradual adjustment in the policy rate range will likely be appropriate". That said, chances of a December rate hike have now fallen below 70% (was 81% a week ago).
Not much new on the macro front, though Reuters reported this morning China prepared to defend psychologically important level of 7 yuan per dollar. Italy’s Salvini said government will take counter measures to prevent rising yields from damaging economy. Breixt talks reportedly on hold with May’s cabinet at odds on how to proceed. Washington Post latest to discuss Powell’s push to protect Fed independence.
Amazon profitability better, but revenue guidance below and AWS growth slowed. Alphabet revenue missed, but takeaways still positive. Intel beat and raised on data center and PC strength. Snap guided for DAU decline to continue in Q4. Western Digital highlighted challenging business environment and lowered guidance. Expedia EBITDA beat. Chipoltle comps missed, though EPS beat. Mattel sales missed on Toys and FX headwinds. Mohawk latest to flag input price pressures in housing markets.
Yesterday was the busiest of earnings season; we’re now nearly half way done with 233 names having reported. Only 58% of names have beat on the Revenue line, down from 72% in Q2.
As mentioned on Twitter at 3pm yesterday, I added some downside exposure via QQQ and SPY puts. SPY Nov 267/255 put spread for 2.30, QQQ Nov 168 puts for 3.15, QQQ expire today 167 puts for .40. I will be taking profit on today's Q puts expiring.

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