Market Overview

Opening Bell: U.S. Futures, Stocks Slide On Energy And Inflation Worries; Oil Up

  • Market sentiment contradictions 
  • Europe STOXX 600 Index developing H&S top
  • Oil trades over $80

Key Financials 

US stock futures on the Dow, S&P, NASDAQ and Russell 2000 as well as European equities were trading lower on Monday ahead of the US open, as persistent inflation worries were exacerbated by concerns that the global energy crunch will disrupt the economic recovery and that upcoming earnings results may show signs of a slowdown. 

Gold continued to slide.

Global Financial Affairs

In Europe, the STOXX 600 declined with travel and leisure, while commodity related stocks, including energy and mining, dug in their heels, mitigating losses. 

STOXX 600 Daily

The pan-European benchmark is trading along a H&S top.

The apparent contradiction of the energy sector rising, while travel and leisure stocks are being sold off is unusual. Typically these sectors correlate, as energy is a vital component of travel. Another potential anomaly is the drop in the bank sector as the market narrative is blaming the current selloff on the inflation outlook.

Perhaps banks are climbing because along with higher inflation, there is an expectation of higher interest rates, the bread-and-butter of banks. 

Sure enough, yields on the 10-year Treasury note are increasing, signaling investors’ expectations of rising rates.

10-year Treasuries Daily

Yields are repeating the previous jump out of an ascending triangle-bottom, after completing a falling flag, bullish after the preceding surge.

Another incongruity in the market is rising yields while stocks fall. Generally, the two are positively correlated, as investors rotate between risk and havens.

So where are investors putting their cash after selling stocks? In shorter-dated bonds. The 1-month Treasury yield was flat, while the 3-month Treasury yield fell, as investors increased demand.

The dollar rose along with the 10-year yield, even after Goldman Sachs reduced its outlook for US growth for this year and next, due to a slower than anticipated recovery in consumer spending.

Dollar Index Daily

The greenback has been developing a bullish pennant, whose completion will signal a resumption of the rally after completing a massive double-bottom.

Gold was lower for the third straight day. The price has been depressed for some time amid the strong dollar rally. However, technically, it can still turn around.

Gold Daily

The yellow metal is developing the right shoulder of a small H&S bottom, itself making up the left shoulder of a larger H&S bottom.

Bitcoin jumped to its highest level since May.

Oil traded over $80 for the first time since Oct. 31, 2014, amid a global energy crisis, due to stagnant production during the coronavirus pandemic.

Up Ahead

  • US Jolts Job Openings are announced on Tuesday.
  • FOMC member RIchard Clarida is speaking on Tuesday.
  • On Wednesday, the US CPI figures are published.

Market Moves


  • The STOXX 600 fell 0.5%
  • Futures on the S&P 500 fell 0.6%
  • Futures on the NASDAQ 100 fell 0.7%
  • Futures on the Dow Jones Industrial Average fell 0.5%


  • The Dollar Index rose 0.2%
  • The euro was little changed
  • The Japanese yen dropped 0.6%
  • The British pound fell 0.5%


  • The yield on 10-year Treasuries advanced two basis points 1.612!
  • Germany’s 10-year rose two basis points to at -0.1195%
  • Britain’s 10-year yield advanced one basis point to 1.22%


  • Brent crude surged 2.1%
  • WTI crude jumped 2.6%
  • Gold futures fell 0.2% 


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