With Nonfarm payrolls declining 467,000 in June, compared to economist expectation's for 350,000, the rotation out of risk assets could precipitate a pullback in risky assets like equities.
The 2 most important things to watch are the U.S. Dollar Index and Bond Yields.
So far today the Dollar is up against major currencies, and bonds yields are down. This trade alone is not to advantageous for risk assets.
The market looks weaker across the board, especially energy and tech, as crude oil is down some 2 bucks and change.
I don't expect the market to totally fall out of bed today as the upcoming holiday will have traders exiting early, but there is definitely no bid in for equity assets so far. Next week will tell the tail as investors digest these awful payroll numbers in between BBQ.
You make a good point that the risk trade is over. Watch treasury yields over the next week.
ReplyDelete