Yesterday markets paid homage to the IU victory with a sea of red after the revival of tariff and Greenland headlines over the weekend and a surge in global yields emanating from Japan. There was broad based weakness with major US indices falling by >1%. The S&P 500 dropped 2.1%, reversing all of the YTD gains, breaking its 50d ma (~6,830). Mega-cap tech underperformed with the NSYE FANG+ index falling nearly 3% while the Russell 2k outperformed on a relative basis down only 1.1%. Markets closed pretty much at the lows with the VIX moving above 20. The pickup in volatility along with the break of some key technical levels suggests that there could be some more systematic derisking to come.

It was quieter overnight from a headline perspective leading to a tepid bounce in US futures however, futures turned negative slightly negative ahead of President Trump’s Davos address which was slightly delayed after Air Force One was forced to turn around following some technical issues. Last night President Trump officially signed an executive order limiting institutional ownership of single-family homes which had been telegraphed over the last week. The speech has largely been a victory lap of the policies put in place over the last year. Futures have turned slightly higher as he called for negotiations about the purchase of Greenland as opposed to taking it by force. Earnings are starting to pick up broadly speaking the companies that have reported over the last 24 hours have moved modestly lower. Netflix continues to be under pressure down >5% in the pre-market after Q1 guidance disappointed. Johnson & Johnson is trading down ~3% despite solid numbers which is weighing on Dow futures.