The downward momentum from yesterday’s 1.6% selloff in the NASDAQ has carried through overseas markets overnight and into this morning and has broadened out into other asset classes as well. In Asia Pacific trading, Sydney fell 1.3%, Seoul dropped 2.3% and Hong Kong lost 0.8%. Major European bourses are down across the board with London and Frankfurt down 0.6%-0.9%, while Paris and Milan are down 1.2%-1.4%. US index futures are currently down 0.2%-0.6%.
Just as a big drop in treasury yields over the last two months provided a tailwind for equities, a rebound in yields this week that has seen the US 10-year treasury note yield climb back up close to 4.00%, has provided a headwind for stocks. It also has sparked a broad-based resurgence in the US Dollar against other currencies. Today, cryptocurrencies are taking a big haircut with Bitcoin down 5.4% and Ethereum down 6.1%. Gold is down 1.0%, Silver is down 2.3%. the Aussie Dollar is down 0.5%, and the Euro plus the Loonie are down 0.2%. Commodity action is mixed with Copper down 1.0%, Crude Oil up 0.7% and Natural Gas up 1.6%.
Minutes from the last FOMC meeting are due at 2:00 pm EST today, but since the results of that meeting have likely already been fully priced in, the ISM US Manufacturing PMI report due at 10:00 am may attract more attention from investors. Yesterday, Canadian and US S&P Global Manufacturing PMI reports were disappointing, as was weaker than expected growth in US Construction Spending. In addition to the headline Manufacturing PMI number (street 47.1), investors may look to the New Orders component for an indication of economic momentum, and to the Prices Paid component for an indication on what is happening with inflation.