S&P 500 e-mini futures are over 20pts below their day-session closing highs on Friday as energy and financials lead the plunge. The major financials appear to have finally woken up to the hypothecated reality of huge collateral calls on the back of their downgrades, the lack of a simple debt mutualization burden-sharing pile-on to Germany, and now Italian banks asking for a bailout from the ECB; with Citi and BofA down almost 7% from pre-downgrades and JPM/MS/GS all down around 5%. VIX has extended its after-hours spike in futures from Friday and trades back above 21% (up almost 3 vols from day-session close). With oil tumbling once again and Treasury yields giving all of Friday's rise back, risk assets in general are leading stocks lower and as we opened this morning, ES snapped down to converge with CONTEXT. Gold and Silver are sideways as Copper and Oil fall while USD pushes higher still on EUR weakness below 1.25 (and only JPY stronger among the majors as carry gets unwound in a hurry). Not pretty. Spanish and Italian bank stocks (and credit) are being crushed/halted and Spanish 10Y yields are back over 6.50% (and spreads over 500bps).
The TBTFs have woken up to post-downgrade reality...
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and S&P 500 e-mini futures are tumbling after the perfect 38.2% retracement bounce on Friday...
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and risk assets, which led stocks lower all morning, have seen stocks recouple with them now at lower levels...
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as Oil and Copper roll back towards lows, but Gold and Silver are holding in for now...
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Charts: Bloomberg and Capital Context [10]