Black Monday?

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, April 7. Black Monday? We’ll see…

State of Play

Investors are waking up and staring into the abyss this Monday morning. Friday was ugly and the pace of selling has accelerated with futures opening. As we eye our board of indicators for signs of direction at 0630 it is all risk-off. Happily, indexes are well off of the lows however:

• Stock index futures are pointing dramatically lower, but are off of the lows — for now. Small caps are seeing the worst of it, with the Russell 2000 down almost 2.4%. S&P 500 and Nasdaq are down 1.5% and 1.7%, respectively. And that is actually quite harmless considering to where futures opened with major indexes down 5% plus!

• Commodities are getting dumped as well. WTI crude oil is down 3% to trade around $60/barrel. That’s its lowest level since late 2020. Copper is down 1%. Gold is holding up, trading roughly even while silver prices are rallying for some reason, up 3.5%;

• Cryptos are a sea of red. We spoke on Friday about how cryptos had held up during all the selling? Well, no longer. Bitcoin is down 7% to trade around $78,000;

• Bonds are weirdly mixed. There is some buying at the short-end of the curve, the most risk-averse part of the bond market. The 2-year yield is down 10 basis points to 3.57%. The 10-year is unchanged at 3.98%. The 30-year is up 3 basis points to 4.42% (yields move inversely to prices).

Live shot of investors (by author, via AI)