U.S. Futures & World Markets

Stocks are in a holding pattern to start the week ahead of some potential market-moving headlines. This week we'll get Nvidia earnings, Jackson Hole, and Bessent's "economic D-Day" press conference on Iranian sanctions. Throw in US-Canada tariffs and you can see why the market is happy to sit on its hands for now.

US Treasury yields continue to move higher for a multitude of reasons — the growth of US debt (hit $40 trillion this week), the Iranian oil disruption, and skyrocketing hyperscaler capex spending are all putting upward pressure on yields. While stocks remain in an uptrend and the earnings growth outlook looks strong, there are plenty of reasons for investors to remain a little defensive.

BofA's Data Analytics team on Bessent's bond market strategy: if Bessent can't drag the 30-year yield below 5%, it means a US dollar slump and short risk, short leverage (AI hyperscalers, private credit), short cyclicals (financials) into midterms. That's a pretty aggressive scenario, but it highlights the bigger issue: stocks can keep climbing, but if the bond market doesn't cooperate, eventually something has to give.

S&P Futures vs. Fair Value: -12.00  |  10-Year Yield: 4.71%

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Charts & Data

No AI jobs shock in the Philippines or India — the unemployment rate in both countries continues to trend lower, well below 2021 levels — despite massive AI exposure in their outsourcing industries. Torsten Slok, Apollo: "The hard data still show no signs that AI is generating job losses in the economies and industries most exposed to it."

Global earnings are bucking their usual trend of sideways-to-downward movement — 2026/27 EPS estimates for the MSCI All Countries World index are surging. Callum Thomas: the same FEMO dynamic Nick highlighted last week is now a global phenomenon.

The proportion of countries seeing earnings downgraded has dropped to cycle lows — a sign of strength reinforcing the global equity bull market. Callum Thomas: breadth of earnings improvement is global.

US Flash PMI: fastest output growth in over four years so far in Q3. Survey data pointing to annualized growth approaching 3.0% — well up from the 1.5% pace in Q2. S&P Global via Daily Chartbook: the economic backdrop is materially stronger than the bond market's anxiety suggests.

S&P 500 total short interest is near record highs — a lot of bearish positioning sitting underneath a bull market, and potentially a lot of future buying power if shorts unwind. Callum Thomas via Schaeffer's: the largest structural tailwind for equities that nobody is talking about.

Top 10 S&P stocks' forward PE ratio has dropped to the bottom end of the range of the past decade — either a sign of a waning bull market, or a big reset bonus for bulls. BofA via Callum Thomas: a valuation question that Nvidia earnings this week will go a long way toward answering.

Seasonality says we are right about due for a VIX flare-up. The good news: if we do get the fabled seasonal correction, seasonality turns positive into year-end. Topdown Charts: August-September volatility is historically the entry point for the Q4 rally.

15 straight days of calm S&P moves relative to implied vol. History shows a couple of tops and a lot of bullishness after similar streaks in the 0DTE era. @oddstats via Daily Chartbook: the low-vol tape is not historically a warning sign — it precedes strength.

Combined 2-week flows into the 20 largest government bond ETFs near a record $7.6B — only higher in July 2022. Investors are buying bonds despite rising yields. Bespoke via Daily Chartbook: a potentially important turning point for fixed income positioning.

Gold's price action tends to get echoed in long-term interest rates about 20.5 months later. Bessent's $4B in T-bond purchases are not going to be enough to push back the tidal forces gold is telegraphing. Tom McClellan via Daily Chartbook: gold is still signaling higher rates ahead.

Bitcoin's 5-day rate of change exceeded +20% — 5 out of 6 prior occurrences since 2020 were followed by swift upside. Especially bullish at low inflections like 2020 and 2023. @calebfranzen via Daily Chartbook: momentum has historically compounded from this setup.

Retail traders on Robinhood treating the S&P's post-ATH consolidation as an opportunity to aggressively add risk in single stocks. Luke Kawa, Sherwood via Daily Chartbook: the most consistent bull market support mechanism shows no signs of fading.

Nomura's Chip Shortage Index rose to 103.8 in July — close to the highest level in the series. The shortage-led upcycle could extend through 2027 and beyond. Nomura via Daily Chartbook: physical scarcity of compute remains the defining structural constraint of the AI era.

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