This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.
Happy Friday, everyone.
Well, it’s not all that happy. There are more sellers than buyers today, putting this mini rally in jeopardy. We closed out on Thursday with equities higher for the week, but U.S. futures point to a weak open today, and that could extend the month-long losing streak we’re on.
Crypto is mixed. Bitcoin is showing signs of life, with Ethereum flat.
Let’s see what else is moving markets as we close out the trading week.
Markets update
Asia
- Asia is mixed. The Nikkei is up (+2.1%) in afternoon trading while shares in Hong Kong and Shanghai sink.
- Another day, and still no word from Evergrande Group on whether it had met yesterday’s deadline on an $83 million interest payment. Shares plunged a further 11.2% as of Friday afternoon.
- And shares of Evergrande’s EV unit—yes, this is a property developer that happens to make electric cars—fell as much as 23% at one point today on a Bloomberg report the company skipped out on paying employees.
Europe
- The European bourses were sagging in early trading with the Stoxx Europe 600 down nearly 0.7% in the first half hour.
- Investors, you can breathe easy. ECB President Christine Lagarde gave CNBC an update yesterday on the Evergrande crisis, saying, “in Europe and in the euro area, in particular, direct exposure would be limited.”
- Germans head to the polls this weekend to name a successor to Angela Merkel. Fortune’s David Meyer handicaps the field, and details what’s at stake.
U.S.
- U.S. futures have been sinking throughout the morning. That’s after the S&P 500 turned positive for the week yesterday, having notched its best two-day stretch since May. Again, banks and energy led the way.
- Tech stocks did fairly well on Thursday, too. That’s despite the yield on the 10-year Treasury note jumping 13 basis points yesterday, the biggest one-day burst in seven months.
- Shares in Nike are off nearly 4% in pre-market trading after the athletic wear giant delivered an underwhelming sales outlook as supply chain bottlenecks are expected to hit the business in the run-up to Christmas.
Elsewhere
- Gold is up, now trading around $1,760. Week in week out, it’s going sideways.
- The dollar has been climbing all morning, a bad sign for stocks.
- The crude rally is up a tick with Brent trading above $76/barrel.
- Bitcoin is flat, trading around $44,000. That’s down about 10% in the past seven days.
***
By the number(s)
26
Lost in much of the excitement of yesterday’s equities rally was the bonds story. Yields climbed just about everywhere on Thursday (and are holding those gains this morning) after the Fed on Wednesday signaled it will begin tapering by year-end and tightening rates after that. This morning, the yield on the 10-year Treasury note sits at 1.438%. That’s not very high by any historical standards, but is 26 basis points above the August lows. With yields jumping, we see cyclicals and value stocks pop. On cue, bank stocks have taken off over the past two days, and up about 4% since Tuesday. With real rates climbing, lenders stand to do well, and that’s attracting investors. The move is a clear sign the reflation trade is back on track. We saw this at the start of the year, and financials rocketed higher.
***
Have a good weekend. But first, there’s more news below.
***
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Two weeks later, how is El Salvador’s Bitcoin strategy going?—Fortune
The EU’s green bond plan charts a path forward for climate finance—Fortune
China needs investors to supercharge the world’s largest carbon market—Fortune
Bull Sheet readers, we have a special offer: 50% off your subscription to Fortune. Just click here, and use the promo code: BULLSHEET . . . Thank you for supporting our journalism.
Market candy
Brandemic marketing
It's been a true pleasure to edit our special package of reports on marketing in the age of COVID. We have stories from Fortune writers around the globe on brands, marketers and new digital cultural crazes that really took off since the pandemic hit. There are all manner of surprising success stories. And, of course, big thinking about the future of marketing. Spoiler: nothing will ever be the same, and some marketing whizzes are just fine with that.
