Market Update

Happy Friday,
 
Yesterday any Opening Day optimism quickly faded as President Trump warned that Iran “better get serious”, Axios reported the Pentagon was preparing for a “massive final blow” and reports that Iran hardliners are ramping up calls for a nuclear bomb. Equities opened modestly lower tried to bounce during the televised Cabinet meeting but then steadily sold off throughout the session. Oil prices and Treasury yields resumed to the upside with ICE Brent approaching $110 again and the 2yr yield back at 4% about 65bps off the low hit a month ago. The S&P 500 fell 1.75%, its biggest decline since January, closing just above last Friday’s low, but it was the second lowest volume day this year. Tech stocks led to the downside with pretty broad-based losses. The NYSE FANG+ index fell >3% breaking to fresh YTD lows down ~13% YTD with Meta/Alphabet some of the worst performing stocks after a landmark social media addiction court ruling. After moving higher for the first three days of the week small and mid-cap indices also came under pressure falling between 1% - 2%.
 
Shortly after the close President Trump posted that at Iran’s request, he was extending the impending deadline for 10 days to April 6^th. This helped futures bounce but it was a far cry from the 250pt reversal on Monday morning and gains have faded overnight as Israeli/Iran strikes resumed, there are reports that the Pentagon is considering sending in an additional 10k troops and Iran says the Strait is closed turning back ships. There’s also a new Claude model leak which is hitting cybersecurity (CRWD/PANW -5%) and software names again in the pre-market. S&P futures were up ~0.5% before the European open but have turned red and is now down a similar amount with the VIX approaching 30 again.
 

 
The only economic data on the calendar today is the final U of Mich. Sentiment survey after the open and there are a couple of Fed speakers throughout the morning. There is a steepening of the yield curve as the 2yr yield has backed off the overnight high down 1bps while 10/30yr yields are up 4bps approaching 4.5%/5%, respectively. The USD index is back near the recent highs just under $100.
 
Government Yields

• US 2yr +0bps to 4.00%, 5yr +5bps to 4.14%, 10yr +6bps to 4.48%, 30yr +6bps to 5.00%
• USD index: +$0.18 to $99.89

 
Asian markets were mixed overnight. Local markets in China ended modestly higher after an improvement in industrial profits. The Nikkei was slightly lower Japan’s Finance Minister once again tried to jawbone the Yen higher as it approached the closely watched 160 level. Most European indices are down ~1% looking to end the week mixed. UK retail sales fell less than expected.
 
 
 
Oil prices are up ~2.5% with ICE Brent trading back over $110. US natural gas prices are modestly higher but prices in Europe are modestly lower. Precious metals are moving higher recouping some of this week’s losses. Ag is moving higher. Crypto is under pressure with Bitcoin down >3% after failing to hold over 70k and now breaking recent lows currently ~66.5k. Ethereum is also down >3% breaking back below 2k.
 

 
Earnings:

• After-Market: AGX, OXM
• Earnings Pre-Market: CCL

 
Economic Data:
US:

• 10:00 U of Mich. Sentiment (final)
• 11:00 Fed Barkin
• 11:30 Fed Daly/Paulson
• 1:00 Rig Count

Global:

• China Industrial Profits: 15.2% prior 0.6%
• UK Retail Sales: -0.4% vs. -0.7% cons., prior 2%
• Spain CPI: 1%/3.3% m.m/y.y vs. 1.2%/3.7% cons., prior 0.4%/2.3%
• ECB Consumer Inflation Expectations: 2.5% prior 2.6%