A bit of Risk off /continuation of yesterday’s Theme 2s-10s spread at 4.81 closer and closer we go towards zero the louder recession warning bells ring. U.S. 30 year yields continue to trend towards all-time lows, it appears trader’s intention to get to all time low yields come hell or high water. Per BAML, “the long U.S. bond trade is the most crowded trade for the third month in a row “also from it source” Investors slash exposure to cyclicals to buy U.S. treasuries and U.S. growth stocks”
More Bad news out of Germany
–GER Aug ZEW Expectations: -44.1 vs -28.0 cons -“Current Situation: -13.5 vs -6.3 cons-ZEW: Indicator points to a significant deterioration in the outlook for the German economy; escalation in US/China dispute, Brexit and the risk of competitive devaluations place additional pressure on an already weak economy; will place further strain on German exports and industrial production
Dax -1%, Cac -.6%, 18-19 stoxx 600 sectors down on day. Hong Kong stocks down another 2% today as protestors continue to occupy the Airport; rumors still circulating that Chinese army is ready to squash protestors at a moment’s notice. Spoos and Nasdaq -.3%, Dollar little changed but that all can change with the release of today’s CPI report. A bit of inflation is what Bond market is not prepared for.
Yesterday’s Collapse in Argentine stock market was second biggest drop on record 48%; the third biggest one-day drop was also the Argentine Benchmark, Perils and issues popping up all over the world. Live cattle in premarket offered limit down after it closed limit lower yesterday, Corn after locking limit down into close yesterday trading another 60 ticks lower as I type. Gold +1.1% as it broke above last week’s highs with a bit of Momentum
6:00 Small business optimism index beat consensus