There won’t be any help from the economic calendar today with no US data coming and no Fed speakers on the agenda. We could see some Fed talk on TV but I suspect those who don’t need to speak right now would rather watch and see how markets sort themselves out.
At the moment, S&P 500 futures are down 2.8% which is about 2 percentage points above the lows.
The spot I’m watching is bonds. US 10-year yields fell as low as 2.88% at the weekly open but have since run to 3.98%. I don’t think that’s a view on the economy but a troubling sign of forced liquidation or a race to raise capital. It’s early to be worrying about a blowup in basis trades or some other kind of trouble but we saw that at the peak of covid and it forced the Fed to pledge unlimited QE. The problems haven’t gone away as no one really attacked any of those issues and they’re arguably worse in a more-leveraged world.
Another thing I will be watching for is margin calls at the equity open and a wave of selling there.
Finally, the day will be spent watching Trump’s Truth Social feed and for other leaks.
