'Sell All' Battle Cries Heard Across Markets Ahead of U.S. Open





(Bloomberg) -- Before a single share moves in regular U.S. trading hours, investors are braced for an ugly New York open, lashed once again by a litany of punitive forces.

They're rushing to hedge sinking S&P 500 futures, while oil is tumbling as OPEC struggles to agree on an output cut.

"So much for a pause in the action," Stephen Innes, head of Asia-pacific trading at Oanda Corp. wrote to clients. "'Sell All' battle cries are ringing out across trading floors again."

Here are the charts that show the grim open awaiting the U.S. market.

The selling pressure in U.S. equity futures was so immense in the first six minutes of trading the CME Group Inc. was forced to trigger multiple so-called velocity logic events -- market pauses to prevent severe price swings.

At the open U.S. futures then duly dropped 1.9 percent from Tuesday's close as 36,720 shares were traded in the first 10 minutes. That far exceeds the one-month average of 5,262 shares.

Pre-market action across exchange-traded funds show investors are sniffing all manner of tactical and strategic plays across assets.

The five biggest gainers in U.S. ETFs with more than $500 million in assets are funds betting on a swift market plunge. The top two are volatility funds which bet that equity-price swings will erupt. The VelocityShares Daily two-times leveraged VIX fund gained 15 percent as of 9:07 a.m. in New York. The next three were funds that wager against the Nasdaq and the S&P 500.

Likewise, the VIX itself spiked to 24, the highest level in more than a month.

Crude's 3.4 percent plunge hypnotized investors during early morning trading. Volume in the United States Oil ETF, or ticker USO, at one point was outstripping the largest exchange-traded fund, the SPDR S&P 500 ETF, or SPY.

That's a big deal: On average over the past five years, SPY sees more than four times the daily action of the oil benchmark.

"Suddenly there's a wall of worry that looks like it's made out of cinder blocks and not lego blocks any more," Bob Michele, the chief investment officer and head of global fixed income at JPMorgan Asset Management, said on Bloomberg TV.

--With assistance from Cecile Gutscher, Tom Keene and Francine Lacqua.

To contact the reporter on this story: Dani Burger in London at dburger7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Sid Verma

For more articles like this, please visit us at bloomberg.com

©2018 Bloomberg L.P.

COMMENTS

More Related News

Kavanaugh, Supreme Court Let Stand Rulings Favoring Planned Parenthood
Kavanaugh, Supreme Court Let Stand Rulings Favoring Planned Parenthood

Kavanaugh voted to leave intact lower court rulings that let Planned Parenthood sue Kansas and Louisiana to try to preserve the Medicaid funds. Justices Clarence Thomas, Samuel Alito and Neil Gorsuch said Monday they would have heard the appeals, which contended the federal Medicaid law doesn't allow lawsuits by providers who are kicked out of the program.

China to Announce Resumption in U.S. Soy Purchases Soon
China to Announce Resumption in U.S. Soy Purchases Soon

The final decision will be made by the State Council or cabinet, said the people, who declined to be identified as the matter is confidential. The decision comes just over a week after U.S. President Donald Trump and Chinese counterpart Xi Jinping pledged during the G20 meeting in Argentina to resolve the trade tensions that have disrupted global commodity flows. The resumption of U.S. soybean purchases will provide some relief to American farmers who have seen exports to the world's biggest consumer plummet and domestic inventories pile up.

U.S. Stock-Index Futures Drop as Traders Eye China Trade Spat
U.S. Stock-Index Futures Drop as Traders Eye China Trade Spat

December futures slid as much as 1 percent on the S&P 500 Index and were trading 0.3 percent lower by 8:20 a.m. in London on Monday after China summoned the U.S. ambassador following the arrest of Huawei Technologies Co.'s chief financial officer. Futures on the Nasdaq 100 Index and Dow Jones Industrial

Stocks Drop on Heightened Trade Worry; Yen Gains: Markets Wrap
Stocks Drop on Heightened Trade Worry; Yen Gains: Markets Wrap

The yuan weakened with the Australian dollar, while Treasuries climbed with the yen as haven assets caught a bid. Futures on the S&P 500 Index dropped 0.8 percent and shares fell in Australia, Japan and South Korea, building on a weak Friday session when U.S. equities sank more than 2 percent. Dampening the mood at the start of this week was news China's vice foreign minister has summoned the U.S. ambassador Terry Branstad in protest over the arrest of Huawei Technologies Co.'s chief financial officer and weak data on China's slowing economy.

Wisconsin Democratic Governor-Elect May Sue If GOP Limits Power
Wisconsin Democratic Governor-Elect May Sue If GOP Limits Power

"I need to stand up for the people of Wisconsin," Evers added. Evers, currently Wisconsin's education superintendent, defeated Walker in the Nov. 6 election and will take office on Jan. 7. The Republican-held legislature, in its lame-duck session, passed bills last week that would weaken the governor's powers prior to Evers taking office.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

  • Buy essays
    (2018-12-07 04:29:33Z)

    Many are not getting time to read the news because of their hectic work. Every citizen should carry basic general knowledge about their society. Your site is a perfect platform for those who are not able to read a newspaper. I am a writer at essay writing service. Sometimes I don’t get time to read but for my carrier, it is important to have some knowledge about the general things. I must say you are the best platform to read current happenings.

    REPLY

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.