US stock futures point to an ugly start to the week

S&P 500 futures are down 76 points, or 1.3% in yet-another Monday massacre. Nasdaq futures are down 1.6% with some of the memes/momentum stocks looking particularly ugly.

CNN’s Fear and Greed index is at 18 at the moment, which is ‘extreme fear’. To be far, it was also at this level a week ago, though that was partly on uncertainty around Canada-Mexico tariffs.

The message that stock markets and the economy need to ‘take their medicine’ before the economy can turn is a challenging one for risk assets and risks spiralling.

I’m starting to sense that sentiment is too bearish. Yes, the AI trade will have a reckoning and Trump isn’t helping with tariffs but, ultimately, you have to believe that tax cuts and deregulation are coming. It might take until after April 2 tariffs to get some sense of clarity but Hassett today hinted that Canada-Mexico tariffs could come off then.

I don’t hate the setup here.

This article was written by Adam Button at www.forexlive.com.