Investors Cut Equities As Trade War Anxiety Increases

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 8 out of 11 markets closed lower: Shanghai Comp -0.51%, Hang Seng -0.28%, Nikkei +0.02%
• In Europe 9 out of 13 markets are trading higher: CAC +0.33%, DAX +0.05%, FTSE +0.48%
• Fair Value: S&P +2.28, NASDAQ +20.80, Dow -6.92
• Total Volume: 2.19mil ESU & 467 SPU traded in the pit

Today’s Economic Calendar:

Today’s economic calendar includes Redbook 8:55 AM ET, S&P Corelogic Case-Shiller HPI 9:00 AM ET, Consumer Confidence 10:00 AM ET, Richmond Fed Manufacturing Index 10:00 AM ET, State Street Investor Confidence Index 10:00 AM ET, Raphael Bostic Speaks 1:00 PM ET, and Robert Kaplan Speaks 1:45 PM ET.

S&P 500 Futures: #ES Tariff ‘Flash Crash’ Vix Up 40%

The global markets took a hit after President Trump renewed his tariff threats and the S&P 500 futures fell -20 handles before the 8:30 CT open. Christine Lagarde, IMF Managing Director, said it perfectly in a statement earlier this month, “Nobody wins a trade war. One generally finds losers on both sides.” And that’s how it looked yesterday morning as Harley Davidson said it would send more production of its motorcycles offshore.

On July 6, the U.S. is set to impose tariffs on $34 billion in Chinese goods, and an additional $16 billion in tariffs on Chinese products will go into effect after a public review period is completed. When Beijing vowed to retaliate on the same amount of U.S. goods, and under the same timeline, then Trump said an additional $200 billion worth of Chinese goods could be subject to a 10% tariff. Yesterday, China Pres Xi reportedly told various CEOs that Beijing had plans to strike back against punitive American tariffs, saying “In our culture we punch back” –

This set off a chain reaction of selling Sunday night, and by 11:00 CT the ES had traded down to 2710.25, down -46 handles or down -1.63%. The Nasdaq futures (NQU18:CME) were off 181 points, or -2.6%, and the VIX traded 18.99, up +38.2%.

At 11:15 the ES traded down to 2703.75, bounced back up to the 2715.50 area, and then up to 2721.75 before getting slammed back down when the NQ broke the 7000.00 level and made a low at 6995.50. The ES made a low at 2700.50 and then rallied up to 2725.00 as the MiM started going from $485 million for sale to $1.4 billion for sale on the 2:45 cash imbalance reveal. On the 3:00 cash close the ES traded 2720.00, and then went on to settle at 2721.75, down -34.75 handles, or down -1.26% on the day.

In the end it was one giant tariff sell program. The good part was that the NQ held and rallied 75 points off the big figure at 7000.00 and the ES didn’t break 2700.00, but there was big downside volume, 2.14 million contracts traded. In terms of the days overall tone, it was an ugly selloff that was met with a big late day bounce.

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