10Y Treasury yields are hovering back at 2-month highs, but that 'selling' is not rotating into stocks as high-beta 'no brainers' are slumping once again. FANG stocks have erased yesterday's gains and Nasdaq 100 is now back at its lowest since April...
As both bonds and stocks are sold...
S&P futures are sliding this morning, down 0.4% and tracking the accelerating decline in European and Asian stocks, driven by a move higher in global interest rates, which started with Japanese 10Y yields rising to 0.1% for the first time since February, but mostly Bund yields which spiked after tripping stops, and jumped as high as 0.53% for the first time since early 2016. Oil climbs, dollar and gold slide. Economic data include initial jobless claims, trade balance, Markit PMI readings.
With the US out on holiday for the 4th of July, overnight trading volumes have been muted, as Europe started off in the red but has since trimmed most losses (Stoxx 600 -0.1%) while S&P500 futures rose shaprly from session lows spurred by the European open ignoring the risk-off sentiment from North Korea's latest missile launch, trading 0.2% higher, or up 4 points to 2,429 and closing the gap to Monday's last minute tech-driven market selloff.
Nasdaq has issued a market-wide trading halt amid what appears to be a "glitch" that sent a number of the largest Nasdaq-listed stocks to crash or spike to exactly $123.47 per share.
This move crashed the value of companies including Amazon and Apple, sparked chaos in Microsoft, while sending Zynga rocketing up more than 3000%.
After several months of low volatility across assets since mid-2016, particularly in equities, markets were more volatile last week owing to fears of central bank tightening. Volatility picked up first in FX and rates, and then spilled over to equities. However, as Goldman notes, this might not be the end of the low vol regime yet.
Via Goldman Sachs,