Good morning contrarians!
Stock futures are pointing to another lower open on Wall Street. As of 0500 tech stocks are once again seeing the worst of it, with the Nasdaq down 1.6%. S&P 500 futures are off about 1.4%.
Bonds are continuing to sell off as well, with the yield on the 10-year up 5 basis points to 3.18% whilst the 2-year is up 2bps to 2.72%. Those are fresh multi-year highs for both instruments.
Commodities are mixed. Worth noting that copper is down almost 3%. This is the metal perhaps most closely tied to economic expansion (construction requires a lot of copper). Other industrial metals zinc, aluminium, and nickel are all down multiple percent.
Cryptos are continuing to sell off as well, with bitcoin down over 3% to trade around $33,500. Not much of a bear market hedge there.
Earnings
A few of these to tell you about: Duke Energy (DUK), Coty (COTY), Palantir (PLTR) before the open. Tyson Foods (TSN) during market hours and Simon Property Group (SPG) after the close are the highlights.
Economic Data
It’s a slow day for economic data releases. Wholesale trade at 1000 along with CB Employment Trends. Loan Officer Survey at 1400. There are no survey estimates for any of these data points.
The Bottom Line
Last week was rough, with stocks suffering major sell offs on Thursday and Friday. The S&P and Dow are now closer to joining the Nasdaq in bear market territory (defined as a drop of 20% from the peak). Without much on the calendar today it will allow for a lot of pontification over this state of affairs.
Speaking of the calendar, it also happens to be Victory Day in Russia, which has brought a new set of doomsday predictions. Unfortunately we aren’t really in a position to make fun of doomer predictions when it comes to Russia, seeing how so many of them were mocked (including in this space, it bears admitting) prior to the invasion of Ukraine.
Could this all be a buying opportunity? Sure. The economic data really doesn’t indicate much in the way of a slowdown, at least not in the U.S. But then one could probably make this statement at the start of every bear market. At a certain point none of that really matters anymore and market forces take on a life (and narrative) of their own. We may be near that turning point. Or perhaps we’ve already passed it?
One would think that copper may be an important bellwether here. But nobody knows what is going to happen. Do your own research. And make your own decisions.
PSA: There may not be a briefing or a podcast tomorrow, due to the host’s travel schedule. Apologies in advance for the inconvenience.
Nervous Monday: Daily Contrarian, May 9