China-US Trade Deal = Risk On

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, May 12.

State of Play

News of this China-US trade deal is greatly helping risk appetite as we eye or board of indicators for signs of direction at 0655 ET:

• Stock index futures are rallying in a major way. Small caps are leading the charge, with the Russell 2000 up 4.5%. Nasdaq futures are 4% to the good with S&P 500 up 3%;

• Commodities are seeing a surge in oil prices — WTI crude is up 3% to trade around $63/barrel — as precious metals drop with the risk-on mood. Gold and silver are down 3% each;

• Bonds are dropping, keeping with the risk-on theme, with the 10-year yield up 8 basis points to 4.45% (yields move inversely to prices);

• Cryptos are surprisingly flat, with Bitcoin unchanged at $104,000.

Cover art by author via Grok AI