US futures are firmly in the red, Dow futures are down over 500 points as of 8:00AM ET, and markets in Europe are off over 3%. Asia saw the Hang Seng down 2% and the CSI 1% lower, while Japan is closed for a market holiday today and tomorrow. Gold is down on a stronger dollar. Oil is also lower as Libya announced it is about to start producing oil once again.
In other news, there are rising coronavirus concerns in Europe and potential lockdowns look likely. Also, allegations surrounding several banks that have been dealing with suspicious funds, as well as uncertainty over the future of the U.S. Supreme Court and the possibility of additional stimulus against the backdrop of the upcoming election, has rattled investors and are driving markets lower today.
Global lenders were identified in media reports as having allegedly moved over $2 trillion in suspicious funds over a period of nearly two decades, according to Reuters. The reports cited confidential documents submitted by banks to the U.S. government. Five banks appeared most often in the documents: HSBC, JPMorgan Chase, Deutsche Bank, Standard Chartered and Bank of New York Mellon.
This morning banks are down, airlines are off over 3%, and there has been a continued drop in big tech stocks including Apple, Microsoft and Amazon. All three were off by over 2% in premarket trading.
Tomorrow is Tesla’s battery day. The event will follow Tesla’s annual shareholder meeting and is set to showcase its battery capabilities. The automaker’s share price was up 18% last week as analysts upgraded the stock prior to tomorrow’s event.
On Friday we said the deal for Oracle and Walmart to buy TikTok was dead, but on Saturday it was back on. They hope to finalize the deal ASAP.
Friday’s overall market volume saw almost half of it on the close, as we had quadruple witching. It was actually pretty quiet for most of the day. SPY ended up trading 105 million shares, while QQQ traded 86 million, both of which were highs for last week.
Fixed income saw buyers of long-term products SPTL, VGLT and SCHO, while there were sellers of the short-term SPTS, GOVT and SCHO. Emerging markets stayed active with EMB trading above average. There were sellers of HYG, SJNK and HYLB, while JNK saw buyers. All traded above average.
Russell funds IWB (Russell 1000) and IWM (Russell 2000) saw sellers while trading above average.
Sector funds saw buyers in XLF (financials), XLU (utilities), XLI (industrials) and sellers in XLP (consumer staples), XRT (retail) and XBI (biotech).
We have recently written about the flows into TQQQ (3x QQQ). Eric Balchunas from Bloomberg pointed out on Friday: “Volume in leveraged long ETPs has already broken the annual record with 3.5 months to go. Also, of the $1.8T traded, $TQQQ accounts for a third of it.”
First Trust is launching two new ‘buffer’ products today. The symbols are DSEP and FSEP.