00:00The sell off in stocks, gold and bonds, deepen. Let's bring in Mark Cudmore, Bloomberg's executive editor for Markets Live.
00:07Mark, Ed Al-Husseini of Columbia Threadmead is saying it's basically pandemonium out there.
00:12It's sell first and ask questions later. Do we see that continuing today and will it eventually hit stocks?
00:18It really hasn't done so, I think, until now.
00:22It's not hit U.S. stocks too much, but we are having the worst month for global stocks in three
00:27and a half years by some margin.
00:29So we are having an extremely bad time month for stocks. But U.S. stocks have been relatively more resilient.
00:35That said, U.S. equity futures are trading at six month lows. So I think it's six or seven month
00:40lows, in fact.
00:41So I don't think we're being completely impervious there. Does it continue?
00:44Yeah, I think stocks ultimately have more downside.
00:47You know, we still have quite a bit of complacent positioning out there because people are continuing to hold on
00:53to the optimistic idea
00:54that Trump has an incentive to find a solution very quickly because in the midterms, he can't afford this conflict
01:01to continue.
01:02But it's precisely because he can't afford this conflict to continue that Iran doesn't seem to have as much of
01:07an incentive for an off-ramp.
01:08And that's why I have no idea how the conflict transpires.
01:11But I do know that the market is positioned very optimistically and waking up to the idea that maybe they're
01:16a little bit over-optimistic.
01:17So I think that stocks in the short term seem to be reaching a little bit of a panic.
01:22So you'd maybe think that over the next 24 hours we get a little bit of relief bounce at some
01:25point.
01:26But I expect that to be a deceased feline variety of bounce and that ultimately stocks have more downside in
01:31the weeks ahead.
01:33Yields, the 10-year U.S. Treasury yield at 441.75.
01:37Obviously, markets are pricing in, some interest rate increases.
01:40Could that turn around very quickly?
01:42Were there to be a de-escalation mark?
01:47It could, but I also, actually, I think the more rapid turnaround might be if we start trading the growth,
01:55negative growth impact from the conflict if it continues.
01:57I think if we get de-escalation, it won't turn around.
02:01We'll get a, you know, a violent sudden move.
02:02But whether it persists in a follow-through rebound will depend on whether we have visibility on the straight being
02:08sustainably open.
02:09You know, it's not clear that immediate de-escalation gives us that confidence to get traffic flowing freely in a
02:17very rapid time span.
02:18So I think there will remain a lack of visibility, which is why, of course, we'll move rapidly on any
02:24headline.
02:24But it's whether the follow-through comes.
02:25What might be interesting in the bond market is so far we've been trading the inflationary impact on the energy
02:30side.
02:30But the longer this continues, it turns into more of the negative growth impact of the combined stagflationary impulse.
02:36And that might see yields come off a bit.
02:38So actually, I think bonds is the market that's probably overreacted.
02:41While stocks are finally catching up a bit more today, precious metals are doing what they should in tanking.
02:46I think FX has probably been the quietest market and probably where we need a bit more movement.
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