Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Tuesday, Jan. 2, 2024.
State of Play
Happy New Year! Last week was uneventful as anticipated. The S&P 500 failed to close at a new all-time highs. Maybe today? As we look at our board of indicators at 0635, things are quite volatile to start off the new year:
Bonds are selling off, seemingly out of nowhere. The 10-year yield is up 8 basis points to 3.94% whilst the 2-year is up 5bps to 4.30% (yields move inversely to prices). The Contrarian has no good idea as to what could be causing this other than more buyers than sellers. Perhaps some fear that inflation (and rate hikes) aren’t quite dead in the water quite yet;
Stock index futures are pointing to a lower open, with tech seeing the worst of it. The Nasdaq is down 0.6% with S&P 500 futures down 0.3%;
Commodities are showing signs of life, with WTI crude oil up 2% to trade north of $73/barrel and natural gas up 4%. There is a clear catalyst for this, namely trouble in the Red Sea. Copper is effectively unchanged;
Cryptos are gaining ground, with Bitcoin up 6.5% to trade around $45,500.
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