Stocks and futures rebound while crypto continues to wobble and waver

This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.

Happy Friday, Bull Sheeters.

Stocks and futures are gaining this morning as investors buy on yesterday’s dip. Still, it may not be enough to turn the major exchanges positive for the week.

Volumes are seasonally light ahead of earnings season, which kicks off in earnest next week.

The crypto board is colored red, but most alt coins are off their lows.

Let’s see what’s moving markets. We begin in Asia.

Markets update


  • Asia is mixed. The Nikkei is off 0.6% in afternoon trading while the Hang Seng is up 1%.
  • This one doesn’t come as much of a surprise, but still… Tokyo Olympics organizers have decided to hold the Summer Games with no spectators amid a rise in COVID cases. That’s weighing on Japanese shares.
  • China’s crackdown on its homegrown tech stars is gathering pace. There’s word Beijing plans to close a loophole that allows foreign investors to buy shares. Shares in Baidu, Tencent and Alibaba in Hong Kong were mixed on the news on Friday.


  • The European bourses were higher at the start on Friday. Yesterday, the Stoxx Europe 600 suffered its biggest decline of the year. Today, the benchmark is up 0.8% in the first hour with all sectors in the green.
  • Shares in Airbus are up 3% in early trading this morning after the aircraft manufacturer reported a big jump in first-half orders. That’s giving travel stocks, among others, a lift.


  • U.S. futures are bouncing back this morning. That’s after all three major exchanges finished in the red yesterday, with bank stocks getting hit particularly hard.
  • A 10-year Treasury note carries a 1.33% yield this morning. (More on why that matters below.)
  • Shares in Pfizer were up 0.6% in pre-market trading this morning after the pharma giant announced it would seek FDA emergency authorization for a booster dose of its COVID-19 vaccine.


  • Gold is up, trading above $1,800.
  • The dollar is rebounding this morning.
  • Crude is a touch higher with Brent trading above $74/barrel.
  • Yesterday was a volatile one for crypto. It didn’t help that both China and Elizabeth Warren came out firing (again) against the digital currencies. This morning, Bitcoin is trading around $33,000.


By the numbers


The bond markets have made a lot of Wall Street pros look foolish this year. In Q1, bonds were in a bear market, and that sent yields on longer-term debt—the 10-year Treasury note, primarily—soaring. (A reminder: yields move higher when bond prices drop, and vice versa.) At the end of March, the 10-year carried a yield of 1.74%—still low by historical standards, but the Q1 appreciation was so rapid, it signaled to investors we were moving into a new cycle. The narrative then was that investors were betting on huge economic growth on the horizon, which would mean inflation and a rise in interest rates. The yield curve take-off was good news for value stocks like banks, and bad news for growth stocks like tech—the so-called “reflation trade.” In the past month, yields have collapsed. Yesterday, the 10-year touched 1.27%, down 27% from the March high. On cue, tech stocks have jumped in recent weeks, and banks fell. What happened? Investors are rethinking the reflation trade. They see COVID cases on the rise (and vaccination rates plateauing), and there are fresh doubts on a meaningful infrastructure package getting done in Washington. Now, a lot of Wall Street pros are saying, don’t panic, that the reflation trade is “not dead.” That may be true, but the longer we see this rally in bonds, the more foolish some of these stock-picking veterans risk looking.

50, 100, 200 days

Crypto bulls, here’s some good news. Bitcoin and the other alt-coins are pretty quiet this morning. They’ve been mostly trading lower overnight, but we’re not seeing the volatility of yesterday when the likes of Ethereum and Dogecoin fell roughly 10%. The bad news: Bitcoin is essentially flat over the past three weeks. If you zoom out, the picture looks worse. BTC is trading 42% below its 50-day moving average, and 41% below its 100-day moving average. That’s a technical way to say that if you had jumped into the crypto frenzy for the first time over the past three months you’re probably looking at steep losses. In fact, crypto hasn’t been all that great this year. With Bitcoin up 13.4% year-to-date, it’s underperforming stocks. The S&P 500 is up 15% in 2021. However, if you look at the 200-day moving average, your crypto investment is up 210%. In investing (and comedy), timing is everything.


Dear reader: Yours truly will be on vacation next week, soaking up the good life down in Sicily. The formidable Anne Sraders will take the keys to Bull Sheet. As such it will likely arrive in your in-box at a different hour… In the meantime, have a nice weekend!


Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's reads

First this. The everything's-expensive narrative has been rocking consumers and the markets all year. Here's a new entry: steel prices. They're up a staggering 215% in the past 15 months, and that's going to hit prices for things like new refrigerators and cars.

When memes attack. The last time we checked in on Melvin Capital Management it was getting battered by retail investors in the mother of all short squeezes. Six months on, and the hedge fund has revealed its first-half results. And the numbers are bad.

"On fire." That's how Renaissance Capital's Matthew Kennedy, described the IPO market to Fortune's Anne Sraders recently. Here's a look at one of the fastest growing segments of the market in four charts.

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

Quote of the day

There is a strong correlation between shorter working hours and increased productivity amongst wealthy nations.

Here's a good one for a Friday morning... The observation above comes to us from social scientists Guðmundur D. Haraldsson and Jack Kellam. They studied a pioneering employment initiative in Iceland where a massive percentage of the country's workers are on a shortened work week but still collecting their 40-hour-week pay. The result: productivity has gone up. Fortune's Christiaan Hetzner has the full details.

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.

Read More

CEO DailyCFO DailyBroadsheetData SheetTerm Sheet