What is the “Short Vol” Trade and How Is It Impacting Markets?
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What’s in Today’s Report:
- What is the “Short Vol” Trade and How Is It Impacting Markets?
- An Important Trading Range to Watch
- EIA Analysis: A Bearish Report for Oil
Futures are slightly higher despite soft economic data and more earning guidance cuts.
UK monthly GDP declined –0.3% and the UK officially entered recession, although that’s also boosting rate cut expectations.
On earnings, both CSCO and DE cut guidance and both stocks are solidly lower pre-market.
Today is a very busy day of economic data and the data will likely determine if stocks extend yesterday’s rebound or give some of it back.
The key reports are, in order of importance: Retail Sales (E: -0.1%), Jobless Claims (E: 219k), Philly Fed (E: -9.0), Empire Manufacturing Index (E: -12.5) and Industrial Production (E: 0.2%). For Empire and Philly Fed, the price indices will be closely watched and if they show further substantial gains, expect that to push yields higher on inflation concerns.
There are also two Fed speakers today, Waller (1:15 p.m. ET) and Bostic (7:00 p.m. ET), and Waller could move markets as he is part of Fed leadership.
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