STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
Published on 8/20/26 (a/o 2:00 pm)
DOW 52,829 (-634), S&P 500 7,653 (-55), Russell 2000 2,990 (-43), NYSE FANG+ 18,272 (-88), ICE Brent Crude $93.47/barrel (+$1.85), Gold $4,573/oz (+$28), Bitcoin ~72.6k (+2881)
- Equities lower, yields reverse most of yesterday's decline
- Oil continues to climb
- Consumer Discretionary, Staples lagging; Energy, Real Estate higher
- Wide-ranging comments by Bessent
- Check out some of the recent ICE Data/Content:
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- ETF Central: ETF Central: MarketGrader Founder & CEO Carlos Diez
- NYSE Research Insights: Behind the Record Volumes: A Hidden Opportunity
- ICE Mortgage Monitor: Mortgage Holder Equity Climbs to Record $18 Trillion as Annual Home Price Growth Reaches 14-Month High
- Market Storylines
MAC Desk Commentary:
Yesterday the S&P 500 booked a modest 0.2% gain while the equal-weight jumped 1% and Russell 2000 rose 0.5%. The Treasury made its latest imprint on the market following the recent yen intervention and announced an expansion of its repurchase program for 10/30y notes. That triggered a drop in long-end rate and curve flattening while the Dollar weakened, and leading to stocks moving broadly higher. It also allowed us to continue using our Bessent the Warlock meme. Momentum sold off for the second straight day however as AI themes were hit (ICE Semis -2%). A positive cancer trial update from Moderna and Merck sent biotech flying and drove sector-wide strength in Healthcare. Crypto popped as the Dollar weakened and the “debasement” narrative re-emerged, but there were also several developments from the Trump administration (and the President himself) on the industry. Among them: the US discussion “sizable” crypto accumulation, a renewed push for the CLARITY Act and the CFTC reviewing Hyperliquid for eventual access to the US market (though this was already known).
Last night President Trump said the US would launch an “economic D-Day” against Iran, along with any country that aides Iran, without providing details on the potential actions. Ahead of tomorrow’s monthly options expiration, the S&P 500 opened modestly lower as yields reversed yesterday’s move lower and some high profile consumer earnings disappointed- most notably WMT. Around 11am Bessent emerged from his apothecary to discuss Treasury’s latest actions and a whole lot more on CNBC. At its conclusion the S&P had fallen a little further and yields rose a little more than where they were when he started talking. Some of the takeaways:
- The market has “bad information” while he has “asymmetric information”
- The buybacks could be expanded even more than the $4B announcement.
- Knee-jerk narratives and a thin market are a big part of driver of higher yields.
- He will be meeting with the OMB to discuss “fiscal consolidation” with more on that by Monday.
- We can grow our way out of the debt issue
- Crushing economic sanctions on Iran are coming (details Monday)
The S&P has continued to weaken since then, down 0.7% and at the LOD. The equal-weight is about inline. Small caps are lagging.
Discretionary and Staples are lagging, reversing yesterday's strength. Travel & Leisure continue to be weak. Retail is getting hit across sub-groups on Walmart earnings and Amazon is down 2%. Staples look a little better than Discretionary but Walmart’s 10% decline is a major drag. Healthcare is giving back some of yesterday’s gains while the weakness in Industrials this week continues. Deere is a big standout however as it gains 7% after earnings.
Looking deeper at some of those earnings, Walmart is sharply lower. Same-store-sales missed expectations and sustained cost pressures in fuel and pharmacy pressured margins. Management didn’t see customers alter spending habits and the company continues to benefit from the core base seeking value. The sharp reaction is at least party a function of “not good enough” results plus high valuation, even with price declining this year.
Advance Auto Parts is down over 20% after EPS ex-tariff refunds and same store comps fell short of expectations. Management called out “tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.”
Deere (+7%) reported “stable U.S. market conditions” while managing “softer conditions in Brazil and Europe” and continues to expect this year will “mark the bottom of the current ag equipment cycle.”
Alibaba is flat after being down ~5% at its lows. Margins and EPS disappointed on high investment spending and capex jumped 75% to ~$10B to support AI Cloud and Compute growth of 45% y.y.
10y and 30y yields have reversed a substantial amount of yesterday's decline. SF Fred President Daly spoke this morning. She noted she sees no signs of weakness in the labor market nor worrying signs of inflation, and the Fed will stick to its job regardless of Treasury action. Jobless claims remained in their low trajectory. A 30y TIPS auction was very solid and stopped through by 1.8bp. With all the rates movement, the US Dollar Index is a bit higher.
- US 2yr +2bps to 4.19%, 5yr +4bps to 4.39%, 10yr +5bps to 4.70%, 30yr +5bps to 5.24%
- USD index: +$0.10 to $98.83
Jobless claims remained in their low trajectory and the Philly Fed manufacturing survey was better than expected and rose from last month. The main index rose to its highest reading in over 5 years. since April 2021, while the main Expectations index rose jumped to its highest level since 1983. The New Orders index moderated but the outlook rose. Prices Paid and Received saw a similar result. Tomorrow we get flash PMIs to end the week.
European equities were around unchanged but faded along with US futures and ended lower. The FTSE ended unchanged with Energy a leading sector as oil continues to climb, while Finish and Swedish equites were a leader in the region. The DAX fell for the fourth straight day while France’s CAC made it eight in a row. Miners were mixed and tech was lower. Sweden’s central bank kept rates unchanged, as expected. German headline PPI came in hotter than expected. Asian markets finished higher overnight, aided by a weaker dollar. South Korea’s KOSPI gained 6%. Local shares of SK Hynix rose over 10%. The company had announced a buyback program after the Korean close on Wednesday. Samsung saw strong gains as well on hopes of a similar announcement. It also raised chipmaking prices, according to reports. China’s markets were modestly higher. LPR rates were kept unchanged as expected. Alibaba earnings came out after markets closed.
Brent crude (Oct) continues to move higher, up another 2% and near July highs of $94. US natural gas is down about 3% but continues to trade in a tight $2.70-$2.80 range this month. European gas is higher and nearing YTD highs ~$70. Gold is up modestly, adding to yesterday’s sharp gain and silver is higher as it tests the 100d ma. Copper is modestly lower. Bitcoin is adding to yesterday’s rally, trading above $72K after reclaiming its 200d ma. ETH is also adding to gains. Ag is mixed with drought conditions a concern in the US.
Earnings:
After-Market: FLO, OSIS, ROST, WOOF
Pre-Market (Fri): BJ, BKE
Economic Data:
US:
- Initial claims: 206K vs 210K cons, prior 212K
- Continuing claims: 1799K vs 1790K cons, prior 1781K
- Philly Fed Manuf Index: 47.4 vs 25 cons, prior 41.4
- EAI Natural Gas inventories: 16Bcf vs 19Bcf cons, prior 36Bcf
- 4:30pm Fed Balance Sheet
Global:
- Japan Imports/Exports y.y: 27.8% / 23.2% vs 25.1% / 20.1% cons, prior 25.4% / 19.3%
- Sweden rate decision: Unchanged at 1.75% as expected
- China 1/5y LPRs: unchanged
- German PPI y.y: 3.0% vs 2.7% cons, prior 1.8%
STRAIGHT FROM THE TRADING FLOOR
by Eric Criscuolo - Market Strategist
August 20, 2026 a/o 9:15am EST
Good morning,
Yesterday the S&P 500 booked a modest 0.2% gain while the equal-weight jumped 1% and Russell 2000 rose 0.5%. The Treasury announced an expansion of its repurchase program for 10/30y notes. That triggered a drop in long-end rate and curve flattening, easing upside pressure on 10/30y yields while the Dollar weakened, and leading to stocks moving broadly higher. Momentum sold off for the second straight day however as AI themes were hit (ICE Semis -2%). A positive cancer trial update from Moderna and Merck sent biotech flying and drove sector-wide strength in Healthcare. Crypto popped as the Dollar weakened and the “debasement” narrative re-emerged.
Last night President Trump said the US would launch an “economic D-Day” against Iran, along with any country that aides Iran, without providing any details on the potential actions. Ahead of tomorrow’s options expiration, US equity futures were trading modestly lower earlier this morning. Treasuries began to fade yesterday’s move, pushing yields higher and reversing much of the decline at the long-end. Futures weakened, then took another leg lower as Walmart earnings came out, though they are bouncing off their lows as we approach the open.
Walmart is down over 7% in the pre-market Same-store-sales missed expectations though there seems to be a lot of moving parts in the numbers. Advanced Autoparts is down ~20% after EPS ex-tariff refunds and same store comps fell short of expectations. Management called out “tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.” Deere is trading higher, reporting “stable U.S. market conditions” while managing “softer conditions in Brazil and Europe” and continuing to expect this year will “mark the bottom of the current ag equipment cycle.” Alibaba is down ~5%. Margins and EPS disappointed on high investment spending and capex jumped 75% to ~$10B to support AI Cloud and Compute growth of 45% y.y.
Treasury yields are higher but have come off their peaks following this morning’s modest econ data and as SF Fred President Daly speaks. She noted she sees no signs of weakness in the labor market nor worrying signs of inflation, and the Fed will stick to its job regardless of Treasury action. Jobless claims remained in their low trajectory and the Philly Fed manufacturing survey was better than expected and improved from last month. A 30y TIPS auction later today will be interesting after yesterday’s news.
Brent crude continues to move higher, up another 2% currently. US natural gas is down but continues to trade in a tight $2.70-$2.80 range this month. European gas is higher. Gold is pulling back slightly from yesterday’s sharp gain though silver is higher again and cooper is lower too. Bitcoin is adding to yesterday’s rally, trading above $70K after reclaiming its 200d ma. ETH has pulled back modestly. Ag is modestly higher with drought conditions a concern in the US.
Economic Data:
US:
Yesterday the S&P 500 booked a modest 0.2% gain while the equal-weight jumped 1% and Russell 2000 rose 0.5%. The Treasury announced an expansion of its repurchase program for 10/30y notes. That triggered a drop in long-end rate and curve flattening, easing upside pressure on 10/30y yields while the Dollar weakened, and leading to stocks moving broadly higher. Momentum sold off for the second straight day however as AI themes were hit (ICE Semis -2%). A positive cancer trial update from Moderna and Merck sent biotech flying and drove sector-wide strength in Healthcare. Crypto popped as the Dollar weakened and the “debasement” narrative re-emerged.
Last night President Trump said the US would launch an “economic D-Day” against Iran, along with any country that aides Iran, without providing any details on the potential actions. Ahead of tomorrow’s options expiration, US equity futures were trading modestly lower earlier this morning. Treasuries began to fade yesterday’s move, pushing yields higher and reversing much of the decline at the long-end. Futures weakened, then took another leg lower as Walmart earnings came out, though they are bouncing off their lows as we approach the open.
Walmart is down over 7% in the pre-market Same-store-sales missed expectations though there seems to be a lot of moving parts in the numbers. Advanced Autoparts is down ~20% after EPS ex-tariff refunds and same store comps fell short of expectations. Management called out “tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.” Deere is trading higher, reporting “stable U.S. market conditions” while managing “softer conditions in Brazil and Europe” and continuing to expect this year will “mark the bottom of the current ag equipment cycle.” Alibaba is down ~5%. Margins and EPS disappointed on high investment spending and capex jumped 75% to ~$10B to support AI Cloud and Compute growth of 45% y.y.
Treasury yields are higher but have come off their peaks following this morning’s modest econ data and as SF Fred President Daly speaks. She noted she sees no signs of weakness in the labor market nor worrying signs of inflation, and the Fed will stick to its job regardless of Treasury action. Jobless claims remained in their low trajectory and the Philly Fed manufacturing survey was better than expected and improved from last month. A 30y TIPS auction later today will be interesting after yesterday’s news.
- US 2yr +2bps to 4.19%, 5yr +3bps to 4.38%, 10yr +4bps to 4.69%, 30yr +4bps to 5.24%
- USD index: -$0.07 to $98.67
Brent crude continues to move higher, up another 2% currently. US natural gas is down but continues to trade in a tight $2.70-$2.80 range this month. European gas is higher. Gold is pulling back slightly from yesterday’s sharp gain though silver is higher again and cooper is lower too. Bitcoin is adding to yesterday’s rally, trading above $70K after reclaiming its 200d ma. ETH has pulled back modestly. Ag is modestly higher with drought conditions a concern in the US.
Economic Data:
US:
- Initial claims: 206K vs 210K cons, prior 212K
- Continuing claims: 1799K vs 1790K cons, prior 1781K
- Philly Fed Manuf Index: 47.4 vs 25 cons, prior 41.4
- 10:30am EAI Natural Gas inventories
- 1:00pm 30y TIPS auction
- 4:30pm Fed Balance Sheet
- Japan Imports/Exports y.y: 27.8% / 23.2% vs 25.1% / 20.1% cons, prior 25.4% / 19.3%
- Sweden rate decision: Unchanged at 1.75% as expected
- China 1/5y LPRs: unchanged
- German PPI y.y: 3.0% vs 2.7% cons, prior 1.8%
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