President Trump rocks the markets after a Friday morning post about increasing tariffs on China 100% sent US stocks tumbling on Friday and then downplaying the post over the weekend with “Don’t worry about China, It will all be fine”, sending stocks on a strong bounce premarket.
The S&P 500 dropped 2.7% while the Nasdaq tumbled 3.5%. US equities lost roughly $2 trillion in market cap. Morgan Stanley released a note over the weekend that if trade uncertainty/volatility continues into November, the S&P 500 could see a selloff between 8% and 11% from Friday’s close.
The US government shutdown continues this week, raising the risk that many federal workers will not receive their October 15 paycheck.
Silver appears to be in a short squeeze, climbing over 3% to near $52/oz, a record high. Gold is also up, surpassing $4070 and working on a record 8-week run of gains.
Q3 corporate earnings kick off this week with major banks JPMorgan Chase (JPM), Goldman Sachs (S), Wells Fargo (WFC), Citigroup ( C ), Bank of America (BAC), and Morgan Stanley (MS) all reporting tomorrow and Wednesday. For today, corporate earnings premarket include Fastenal (FAST).
The economic calendar is bare as it’s both a federal holiday (Columbus Day) and the US federal government remains in a shutdown.
Fed speakers include Philly Fed’s Anna Paulson @ 12:10 pm.
Volatility is back, skyrocketing on Friday. There’s a good chance US stocks will find a range to work today. The ES 5-day average daily range has jumped to 91.25 points.
Whale bias is leaning bearish into the US session open on elevated overnight large trader volume.
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