Five futures in focus

Nasdaq 100 Drops Following Release of Trump Interview with Bloomberg

By:Christopher Vecchio, CFA

Also, 10-year T-note, gold, crude oil and Japanese yen futures

Five Futures WTD Performance

  1. Nasdaq 100 E-mini futures (/NQ): -1.48% 

  2. 10-year T-note futures (/ZN): -0.1% 

  3. Gold futures (/GC): +0.54% 

  4. Crude oil futures (/CL): +1.11% 

  5. Japanese yen futures (/6J): +1.15% 

A Bloomberg News interview with Republican nominee for president Donald Trump released last night may be behind price action in markets today. Contextualized by the Biden administration’s own actions on China, the Bloomberg interview with Trump laid bare the tenets of “Trumponomics:” higher tariffs, deregulation, onshoring and a desire to allow Federal Reserve Chair Jerome Powell to finish his term into 2028. An old theme may be coming to the forefront of traders’ minds: the U.S.-China trade war. Look no further than action in semiconductors. Companies like Intel (INTC) that produce domestically are doing well today, while others like Taiwan Semiconductor Manufacturing (TSM) that produce abroad are suffering. 

Symbol: Equities 

Daily Change 

/ESU4 

-0.99% 

/NQU4 

-1.48% 

/RTYU4 

-0.82% 

/YMU4 

-0.29% 

Nasdaq contracts (/NQU4) fell sharply this morning after Bloomberg reported the Biden administration is considering placing tougher restrictions on chip companies if they continue to give China U.S. technology. The move puts technology stocks on track to break a three-day win streak fueled by bullish bets on an interest rate cut from the Fed. Market breadth has also improved this week, with the Russell 2000 (/RTYU4) up nearly 10% this month, compared to a 1.8% gain for the Nasdaq.

Housing data showed new construction beat estimates for June, with starts rising 1.353 million, up 3% from the previous month. Five Below (FIVE) fell over 15% in pre-market trading after the retailer provided soft guidance during its earnings report. U.S. Bankcorp (USB) rose 0.5% after beating results for its second quarter, extending a bullish set of earnings from banks.  

Strategy: (44DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 18750 p 

Short 19000 p 

Short 21500 c 

Long 21750 c 

67% 

+955 

-4045 

Short Strangle 

Short 19000 p 

Short 21500 c 

73% 

+4400 

Short Put Vertical 

Long 18750 p 

Short 19000 p 

85% 

+635 

-4365 

/NQU4

Symbol: Bonds 

Daily Change 

/ZTU4 

-0.05% 

/ZFU4 

-0.08% 

/ZNU4 

-0.1% 

/ZBU4 

-0.13% 

/UBU4 

-0.17% 

10-year T-note futures (/ZNU4) retreated today after closing at the highest level since March yesterday. Traders turned increasingly bullish on Treasuries after Trump’s odds to win the election rose following the failed assassination attempt, even though Trump has called on the Fed not to raise rates before the election. The yield curve between the 10-year and two-year notes unwound a significant portion of its inversion earlier this week. Traders are watching a 20-year bond auction reopening today and the Fed’s Beige book, an economics report issued eight times a year.  

Strategy (37DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 106.5 p 

Short 107 p 

Short 113 c 

Long 113.5 c 

70% 

+109.38 

-390.63 

Short Strangle 

Short 106.5 p 

Short 113 c 

73% 

+296.88 

Short Put Vertical 

Long 106.5 p 

Short 107 p 

99% 

+15.63 

-484.38 

/ZNU4

Symbol: Metals 

Daily Change 

/GCQ4 

+0.54% 

/SIU4 

-0.76% 

/HGU4 

-0.36% 

Traders continue to move into the long side of gold, with the August contract (/GCQ4) up 0.54% at the New York open. The metal is pushing into fresh all-time highs after yesterday’s 1.60% gain. A softer dollar and falling yields are boosting the metal’s appeal as traders price in a more aggressive interest rate cut path from the Fed. Traders increased their long bets on gold to the largest outright long position since early 2022, according to Friday’s data from the Commodities Futures Trading Commission (CFTC).  

Strategy (41DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 2350 p 

Short 2375 p 

Short 2600 c 

Long 2625 c 

61% 

+770 

-1730 

Short Strangle 

Short 2375 p 

Short 2600 c 

69% 

+2920 

Short Put Vertical 

Long 2350 p 

Short 2375 p 

86% 

+320 

-2180 

/GCQ4

Symbol: Energy 

Daily Change 

/CLQ4 

+1.11% 

/HOQ4 

+0.24% 

/NGQ4 

-1.33% 

/RBQ4 

+0.23% 

A surprise inventory draw in crude oil stocks from yesterday’s American Petroleum Institute (API) report is driving long bets into crude oil prices (/CLU4) this morning, with the contract up 1.11%, retracing yesterday's losses. Gasoline and distillate inventories rose, which pushed crack spreads lower. The 3-2-1 spread—a key refinery margin indicator that drives hedging decisions—fell to its lowest level since early January. The build in fuel inventories could be due to Hurricane Beryl shutting down export terminals across the Gulf Coast as refinery throughput rises. Today’s report from the Energy Information Administration (EIA) will help to provide more detail into the crude oil complex. 

Strategy (62DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 72 p 

Short 73 p 

Short 88 c 

Long 89 c 

66% 

+230 

-770 

Short Strangle 

Short 73 p 

Short 88 c 

72% 

+1300 

Short Put Vertical 

Long 72 p 

Short 73 p 

82% 

+160 

-840 

/CLU4

Symbol: FX 

Daily Change 

/6AU4 

+0.07% 

/6BU4 

+0.48% 

/6CU4 

+0.06% 

/6EU4 

+0.41% 

/6JU4 

+1.15% 

The prospect of a U.S.-China trade war being rekindled under a second Trump term (which appears to be the base case scenario priced by markets now) may be putting pressure on the U.S. dollar on today, given the fact that U.S. yields are higher and a general risk-averse move in equity markets typically breeds demand for safe havens. In that sense, the Japanese yen (/6JU4) is the clear winner today, a trend that began last week when the June U.S. inflation report showed the lowest reading since 2021. 

Strategy (51DTE, ATM) 

Strikes 

POP 

Max Profit 

Max Loss 

Iron Condor  

Long 0.0062 p 

Short 0.00625 p 

Short 0.00665 c 

Long 0.0067 c 

60% 

+175 

-450 

Short Strangle 

Short 0.00625 p 

Short 0.00665 c 

68% 

+650 

Short Put Vertical 

Long 0.0062 p 

Short 0.00625 p 

85% 

+87.50 

-537.50 

/6JU4

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro. 

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