Still, the VIX has not behaved in its typical fashion for much of this year, said Tyler Richey, a co-editor at Sevens Report Research. Click here to read the full article.
The company, which has a market cap of $252.3 billion, is simply signaling the headwinds to come. This is really confirming so many other signs that we are headed toward a potentially pretty significant economic slowdown, said Tom Essaye, president of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed this morning despite a stabilizing bond market and mostly positive global news flow overnight as yesterday’s hawkish money flows are digested.
Economically, German Manufacturer’s Orders rose 0.8% vs. (E) -0.2% in October suggesting that factory demand may be stabilizing.
In China, new Covid cases have declined for 8 consecutive days and the government is reducing testing requirements, bolstering optimism about a move away from the crippling Zero Covid policies.
Today is lining up to be a fairly slow day of news with just one lesser followed economic release: International Trade in Goods and Services (E: -$80.0B) and no Fed speakers as they remain in their pre-meeting blackout period. That said, equity markets will likely queue off of Treasuries and if we see a further rise in shorter-duration yields due to rising terminal rate expectations, yesterday’s declines could very well continue.
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“In short, Credit Suisse is starting to act like a bank that’s about to go under,” analyst Tom Essaye of the Sevens Report said in a recent note. Click here to read the full article.
“Stagflationary economic data, rising COVID cases in China, and hawkish [Federal Reserve] chatter have all been added headwinds on the oil market today,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
“Looking at the curve, the 10s-2s yield curve spread remained near a multidecade low of nearly minus-80 basis points. That deep of an inversion suggests that the Fed’s current policy and expected path of future policy are far too restrictive for the state of the economy and growth expectations, which will almost certainly end in a recession — and potentially a severe one given the scope of the current inversions across the Treasury yield curve,” said Tom Essaye, editor of Sevens Report Research, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are sharply lower on unrest in China as protests erupted across the country following more COVID restrictions.
Over the weekend Chinese citizens protested in numerous cities following new COVID restrictions, as the Chinese government sticks to it’s “Zero COVID” policy.
Economically the only notable number was EU M3 (money suppled) and that rose 5.8% vs. (E) 6.1%.
Today there are no notable economic reports but there are two Fed speakers, Bullard (12:00 p.m. ET) and Williams (12:00 p.m. ET). Bullard especially has produced some “tape bombs” with his commentary on rates and if he’s again hawkish (talking about 7% Fed Funds) expect that to add to the early losses.
What’s in Today’s Report:
Stock futures are trading lower with global markets following negative Covid headlines out of China.
China reported a spike in Covid cases this weekend including the first Covid-related death in nearly six months which prompted new restrictions and lockdowns in cities that were previously in the process of reopening. That has triggered risk-off money flows this morning with equities declining globally and the dollar rising nearly 1% in early trade.
Economically, the German PPI for October was actually favorable as it fell a steep -4.2% vs. (E) +0.9%. However, in year-over-year terms, PPI remains up more than 30% which is a major headwind for the German economy.
Looking into today’s session, there are no economic reports and just one Fed speaker: Daly (1:00 p.m. ET) which will likely leave the focus on China and any new Covid-related headlines.
In the fixed income space, the Treasury will hold a 2-Yr Note auction at 11:30 a.m. ET and a 5-Yr Note auction at 1:00 p.m. ET. And if demand is soft and rates begin to move to meaningful new highs, expect selling pressure on the equity market to pick up moderately.
Tom Essaye, founder and president of Sevens Report Research, joins BNN Bloomberg to recap earnings from big tech this week. Click here to watch the full interview.
“Renewed hopes for peak Fed hawkishness on the back of cooler-than-expected domestic inflation data unleashed a historic rally in equities,” writes Sevens Report’s Tom Essaye. Click here to read the full article.
