Good morning contrarians! It is Friday, Sept. 16.
Stocks dropped again yesterday, with tech seeing the worst of it. The Nasdaq fell by 1.4%. The S&P 500 declined by 1.1%. Things went from bad to worse after the close, with a profit warning from FedEx (FDX 0.00%↑). The company blamed macroeconomic weakness in Asia and Europe. Perhaps more importantly, its CEO told CNBC he expects a worldwide recession to ensue imminently. FDX shares dropped by 20% overnight.
State of Play
As of 0620, the risk off mood is dominant:
Stock futures are down, led by the Nasdaq (-1.1%). The S&P is off 0.9%;
Commodities are dipping. WTI crude oil is flat at $85/barrel but natural gas is down 2.5%. Silver has finally started to drop, down 2%. Copper is down 1% along with industrial commodities;
Cryptos are getting dumped, with bitcoin down 2% to drop below $20,000. That ethereum merger everybody was talking about? Ethereum is down 8% this morning. Good luck using that as a form of exchange;
Bonds are continuing to sell as well. The 2-year yield is up 3 basis points to 3.90%. You have to go back to the mid-2000s to see those levels. The 10-year is also at multi-year highs, up 2bps this morning to 3.47% (yields move inversely to prices).