August 17, 2018. Philly Fed omen?

–Philly Fed index was a pretty big miss at 11.9 versus expected 22, especially when benefits from tax legislation are supposed to be coursing through the economy.  Could be an outlier, but this decline appears similar to 2015, which encompassed the last energy and emerging market rout.  Recall that hi-yield was crushed at that time, but holding well now.  While stocks and oil and metals bounced yesterday, trends in emerging markets remain dodgy, and the Italy bank index (IT8300) is making a new recent low today.  For a broader look at european financials, EUFN is an etf which has been in decline all year, though it had a modest bounce yesterday after having made a new ytd low Wednesday.
–Yields in the US rose as stocks powered ahead, with WMT surging 9%.  Nasdaq shed almost all early gains and is slightly lower this morning.  Yield on tens closed +2 bps to 287.1.  Red, green and blue euro$ contracts down 3 to 3.5 bps.  Long dated treasuries remain well bid, and will likely close out the week on new highs.
–Sort of an interesting comment by Sara Eisen of CNBC late yesterday, who said the strong dollar is becoming a problem for corporate America.  I believe she said that dollar strength was one of the biggest complaints in conference calls, ahead of concerns about tariffs.  –U of Michigan data today on inflation expectations.
Posted on August 17, 2018 at 5:12 am by alexmanzara · Permalink
In: Eurodollar Options

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