US equities retreated on Tuesday after an 8-day winning streak. Large caps bested small caps: S&P 500 (-0.20%) vs. Russell 2000 (-1.17%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) declined 0.78% and 0.31% respectively.
Yesterday's turbulent price moves in the oil complex point to not only a thinned trading populace but one that is seeing faith drain from those that have remained loyal to the bullish cause.
Crude futures have now lost around 5% of value in 3-trading sessions. Overnight, and adding more insult to injury was the API inventory data. Even with Distillate and Gasoline reducing stock by 2.2 and 1mb respectively, the Crude number outweighs in significance because the strength in the US Crude market has been without doubt the main prop to bullish thinking and how such a lofty backwardation has endured, up until now.
More analysis in premium at bottom…
Market News:
"The dollar hit its lowest level since the start of the year on Tuesday, as investors braced for the Federal Reserve to start lowering interest rates and the August sell-off that spooked markets faded. FT
"The European Union on Tuesday said planned tariffs on Tesla vehicles being imported from China would be cut to 9% from 20.8%, CNBC
"Shein has sued Temu for copyright infringement as it fends off similar allegations from a host of brands and independent artists: CNBC
"OpenAI has inked a deal with Condé Nast —: TechCrunch
Politics/Geopolitics:
The meeting between Blinken and Netanyahu did not succeed in reducing the gaps and did not make progress on the deal",
Israeli raids were reported on towns in Baalbek, eastern Lebanon, while Hezbollah said it confronted an Israeli warplane that violated Lebanese airspace
A deal to bring an end to the fighting in Gaza was said to be on the brink of collapsing and there is no clear immediate alternative agreement that could
Hamas refuted US President Biden's claim that it is backing away from a Gaza ceasefire and hostages deal, while it insisted that the US is yielding to Israel's interests in negotiations, according to FT.
Russian air defences repelled a Ukraine drone attack on Moscow, according to the Moscow Mayor.
Russia's foreign intelligence agency said, without providing evidence, that Ukraine's incursion into Kursk was prepared with the participation of the US, UK, and Poland, while it added that NATO advisers are providing assistance to Ukraine in its incursion into Kursk, according to TASS.
Some headlines via NewSquawk or DataTrek
Data on Deck: Jackson Hole
MONDAY, Aug. 19 9:15 am Fed Governor Christopher Waller welcoming remarks 10:00 am U.S. leading economic indicators July -0.4% 0.2% TUESDAY, Aug. 20 1:35 pm Atlanta Fed President Raphael Bostic speech 2:45 pm Fed Vice Chair for Supervision Michael Barr speech
WEDNESDAY, Aug. 21 2:00 pm Minutes of Fed's July FOMC meeting
THURSDAY, Aug. 22 S&P flash U.S. services PMI Aug. 10:00 am Existing home sales July 3.95 million 3.89 million
FRIDAY, Aug. 23 10:00 am Fed Chair Jerome Powell speech at Jackson Hole retreat 10:00 am 1
