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Yields surging, US futures clawing back, but well below fair value

Premkt minor gains in Futures though still below fair value, and US equities are set to open flat to slightly lower given last nights late plunge.  So S&P futures are now UP 30 handles from levels hit post close yesterday, but yet still implied opens will show slightly lower prices at the open-  Most of Europe down 1% while Asia is mixed.  The big news revolves around bond yields continuing their recent ascent, with US 10yr yields set to open near prior highs and at current levels would close at the highest levels since early 2014 and just striking distance below those highs at 3.05%.  Getting over 3.05% would indeed break the 30year downtrend and be very important to suggesting yields should begin a long-term trend higher (which for now is premature)   Combination of yield and Dollar gains has been hurtful to the Metals and this doesn’t look to change just yet, so a bit more weakness in this area likely into early next week.   Overall, it seems like yesterday’s late pullback was telling and could result in a deeper retracement to our recent Tuesday gains, as breadth and price action proved tepid after this bounce.    Given that stocks and bonds both have been correlating pretty positively of late, further bond declines to take yields back to new highs likely wouldn’t result in equities rallying.  But the next few days will be key in this regard.   Support for S&P is at 2618-22 and then 2604.  Provided S&P remains above 2604, the retracement rally can continue.  UNDER 2604 is problematic and should lead to an immediate retest


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