Last week was defined by an unwind in momentum tech stocks, a solid start to earnings season and an escalation in hostilities between the US and Iran. The later sent oil prices sharply higher. However, better than expected inflation data helped to keep Treasury yields in check. The S&P 500 ended the week down ~1.5% closing just under its 50d ma. Semi and memory stocks came under intense pressure with both groups down >10% for the week. Earnings season saw the banks kick things off with strong reports overall, which helped Financials place among the best performing sectors, alongside Energy, Real Estate and Consumer Staples.

Like we saw on Friday the S&P is trading around its 50d ma and is about flat for the day, though near its lows on the latest news of hostilities coming out of the Middle East. The equal-weight is underperforming a bit as are small cap indices. Breadth is weaker today with 8/11 sectors lower. Energy is leading with crude higher again. Comm Services is right behind, driven by Alphabet. Netflix continues to fall post-earnings and a judge temporarily paused the PSKY (flat) / WBD (-4%) merger. Tech is seeing a bounce from last week’s damage, including memory/storage and semis names (DRAM, ICE Semis +2-3%). Materials and Staples are leading lower, along with Healthcare. Discretionary is outperforming Staples.

Treasury yields have extended to the upside, now +3-5bp across the curve and erasing most of last week's declines. The USD index is higher as well, to around 100.75. Brent (Sept) has traded between $85.75 - $92 today and is currently up ~1% after regaining both its 50 and 100d moving averages on Friday. US nat gas prices are down about 2% and below $3 after trading around that level that past week. European gas continues to move higher as the Russia/Ukraine conflict continues to re-escalate. Metals are mixed. Gold is flat and continues to hold just above $4k. Copper and silver are both bouncing modestly, with copper looking to get back above its 50d ma. Crypto is bouncing off the morning lows. Bitcoin broke through $65K, while Ethereum is ~$1.9K.