Nasdaq 100 Stalls as Traders Brush Off Latest Trump Tariff Tactics
Nasdaq 100 Stalls as Traders Brush Off Latest Trump Tariff Tactics
Also, 30-year T-bond, gold, crude oil and British pound futures
- Nasdaq 100 E-mini futures (/NQ): -0.02%
- 30-year T-bond futures (/ZB): -0.3%
- Gold futures (/GC): -0.95%
- Crude oil futures (/CL): +0.13%
- British pound futures (/6B): -0.44%
Tariffs on Japan, South Korea and others spooked markets modestly yesterday, but a turnaround may be in the works today — at least for equity markets. U.S. stocks have stabilized, with volatility dropping back to levels seen last week. Bonds are a different story, where the combination of bigger debts and deficits against the backdrop of a trade war makes for an uneasy situation for longs. Higher yields are helping the US dollar, which in turn is making for a difficult morning for precious metals.
| Symbol: Equities | Daily Change |
| /ESU5 | -0.07% |
| /NQU5 | -0.02% |
| /RTYU5 | +0.55% |
| /YMU5 | -0.21% |
Nasdaq futures (/NQU5) were slightly higher this morning as traders shrugged off concerns about tariffs. President Trump said he tariff deadline of Aug. 1 is “not 100% firm.” Solar stocks fell this morning after Trump issued an executive order to remove subsidies for renewable energy. Sunrun (RUN) fell over 8% and First Solar (FSLR) dropped 3.6% in early trading. Amazon (AMZN) was nearly unchanged as its Prime Day event kicked off.
| Strategy: (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 22500 p Short 22600 p Short 23300 c Long 23400 c | 18% | +1530 | -470 |
| Short Strangle | Short 22600 p Short 23300 c | 51% | +18675 | x |
| Short Put Vertical | Long 22500 p Short 22600 p | 58% | +675 | -1315 |
| Symbol: Bonds | Daily Change |
| /ZTU5 | -0.02% |
| /ZFU5 | -0.08% |
| /ZNU5 | -0.14% |
| /ZBU5 | -0.3% |
| /UBU5 | -0.4% |
Bond traders continued to sell Treasuries today, with 30-year T-bond futures (/ZBU5) dropping by 0.47% in early trading. Prices are now challenging levels from mid-June as confidence in the US debt market wanes. Concerns about sticky inflation have pushed back bets for rate cuts, with Fed Funds futures now showing only a 4.7% chance for a rate cut in June compared to 20.7% a week ago. The Treasury will auction three-year notes today.
| Strategy (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 111 p Short 112 p Short 114 c Long 115 c | 27% | +703.13 | -296.88 |
| Short Strangle | Short 112 p Short 114 c | 54% | +2593.75 | x |
| Short Put Vertical | Long 111 p Short 112 p | 64% | +359.38 | -640.63 |
| Symbol: Metals | Daily Change |
| /GCQ5 | -0.95% |
| /SIU5 | -0.76% |
| /HGU5 | -0.68% |
Gold prices (/GCQ5) were slightly lower this morning, but prices are holding above last week’s lows. A stronger dollar and higher yields are working against gold prices despite some uncertainty about tariffs. The lower odds that the Fed will cut soon are also working against bullion, but prices remain rather resilient given the factors working against it. Meanwhile, silver prices (/SIU5) were down 0.5%, as the metal’s recent outperformance against gold fades.
| Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 3300 p Short 3305 p Short 3395 c Long 3400 c | 20% | +400 | -100 |
| Short Strangle | Short 3305 p Short 3395 c | 55% | +10480 | x |
| Short Put Vertical | Long 3300 p Short 3305 p | 61% | +220 | -280 |
| Symbol: Energy | Daily Change |
| /CLQ5 | +0.13% |
| /HOQ5 | +0.39% |
| /NGQ5 | -0.94% |
| /RBQ5 | +1.27% |
The threat of tariffs is eating into the demand outlook for crude oil prices (/CLQ5), which were down 0.43% this morning following a gain of over 1% yesterday. Prices remain supported compared to where we were at the end of June, with tensions in the Middle East helping to support sentiment. Meanwhile, OPEC is set to deliver more oil to the market in August to extend its rollback of voluntary production cuts. The American Petroleum Institute will report inventory data today.
| Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 64.5 p Short 65 p Short 68.5 c Long 69 c | 19% | +370 | -130 |
| Short Strangle | Short 65 p Short 68.5 c | 50% | +4110 | x |
| Short Put Vertical | Long 64.5 p Short 65 p | 57% | +210 | -290 |
| Symbol: FX | Daily Change |
| /6AU5 | +0.18% |
| /6BU5 | -0.44% |
| /6CU5 | -0.16% |
| /6EU5 | -0.25% |
| /6JU5 | -0.49% |
British Pound futures (/6BU5) continued to slide on Tuesday as concerns over the fiscal situation in the United Kingdom pushes investors out of UK government bonds (gilts). The pound has now retraced about half of its gains from its June swing low to recent highs, and prices are below the 21-day exponential moving average. The welfare bill is expected to increase UK debt by almost 5 billion pounds by 2030.
| Strategy (59DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 1.34 p Short 1.345 p Short 1.365 c Long 1.37 c | 23% | +231.25 | -81.25 |
| Short Strangle | Short 1.345 p Short 1.365 c | 54% | +1518.75 | x |
| Short Put Vertical | Long 1.34 p Short 1.345 p | 67% | +112.50 | -193.75 |
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
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