Stagflation mood, a calm day ahead for most markets.
The mood
The Risk Pulse is at +4.2: the market is neutral. The pattern right now is stagflation: yields rising, oil up. Our data sources disagree today, so read the number with care. It describes the mood as it is now; it is not a forecast of direction.
What this pattern means: when the pattern is stagflation, raw materials rise while stocks and bonds weaken together. The moves that set it right now: yields rising, oil up. It has been the pattern since Wed 17:20 (Milan time), about 16 hours.
Over the last 24 hours the Risk Pulse started at +37.3 (Wed 08:59) and now stands at +4.2. Its lowest point was +4.0 at Thu 08:52, its highest +40.4 at Wed 09:17; the average of the whole day was +26.1.
One week ago, on Thursday at 09:58, it was −2.4: 6.6 points lower than now.
Our data feeds, each on its own: feed T +39.4, feed E +6.5. The distance between the highest and the lowest is 32.9 points: they disagree, so the number is less sturdy than usual. Right now only feed E counts toward the number; the others are shown for comparison.
- ① Wed 17:26 The pattern turned stagflation; the Risk Pulse was at +13.7.
Above 0 the mood leans toward risk, below 0 it leans cautious. It describes the mood as it was; it is not a forecast of direction.
The last 24 hours, moment by moment
Our instruments flagged 16 moments in the last 24 hours: 9 market moves, 6 sudden jumps in a data feed, 1 change of pattern. In order (Milan time):
| Wed 19:00 | Market move | Ibovespa Brazil down |
| Wed 19:25 | Sudden jump in a data feed | sharp move in E · no market reacted |
| Wed 19:45 | Sudden jump in a data feed | sharp move in E · no market reacted |
| Thu 00:01 | Market move | Austria ATX up |
| Thu 01:19 | Sudden jump in a data feed | 2 sharp moves in 2 min · largest: sharp move in E · no market reacted |
| Thu 01:53 | Market move | KOSPI up |
| Thu 02:19 | Market move | Nikkei 225 up |
| Thu 03:11 | Market move | KOSDAQ down |
| Thu 04:51 | Market move | Taiwan Weighted Index down |
| Thu 08:13 | Market move | Shenzhen Component down |
| Thu 08:32 | Sudden jump in a data feed | sharp move in E · KOSDAQ down · Taiwan Weighted In down · ASX 200 up |
| Thu 08:53 | Market move | Jakarta Composite down |
A change of pattern is when what moves together changes; a sudden jump is a reading far outside the usual for one feed. Neither says where prices go next.
The world, region by region
Asia: an ordinary session. Nikkei level 4 (normal); Hang Seng level 1 (very calm).
Europe: a quiet session. DAX level 2 (calm); FTSE MIB level 1 (very calm); FTSE 100 level 1 (very calm).
United States: a quiet session. Dow Jones level 1 (very calm); S&P 500 level 1 (very calm); Nasdaq level 1 (very calm).
Each level says how big that market's last session was compared with a usual one: 1 very calm, 4 normal, 8 extreme. How much, never which way.
U.S. futures overnight
U.S. stock index futures trade almost around the clock, so they show how the night went. Status: Trading now · nearly 24 hours a day, Sunday to Friday. The busiest compared with a usual day: Nasdaq 100, level 7 (very high).
| FUTURES ON | HOW BIG THE MOVE | LEVEL |
|---|---|---|
| S&P 500 the 500 largest U.S. companies | below normal | 3 |
| Nasdaq 100 U.S. technology giants | very high | 7 |
| Dow Jones 30 U.S. blue chips | below normal | 3 |
| Russell 2000 U.S. small companies | below normal | 3 |
The level compares the move since the last daily close with a usual day, last reading Thu 29 Oct, 08:40 (Milan): 1 very calm, 4 normal, 8 extreme. It is what already happened, never which way and never a forecast of the open.
The currents: what is moving together
We follow 148 readings in 8 groups: 68 are up and 55 down. The most one-sided group: Credit, 0% of its readings rising.
| GROUP | RISING | UP / DOWN | SOURCES |
|---|---|---|---|
| Credit | 0% | 0 / 6 | feeds agree |
| FX | 25% | 5 / 7 | feeds agree |
| Equities | 63% | 24 / 9 | feeds differ |
| Rates | 38% | 3 / 3 | feeds differ |
| Volatility | 40% | 2 / 3 | feeds differ |
| World Indexes | 54% | 22 / 16 | feeds differ |
| Commodities | 47% | 9 / 8 | feeds differ |
| Crypto | 50% | 3 / 3 | one feed only |
For each group: the share of its readings that are rising, and whether our independent data feeds measure it the same way. What already happened, never what comes next.
Today's weather
Of 13 markets we follow, 1 is expected to move more than usual today and 8 less than usual. The busiest: VNQ (U.S. real estate), about 1.12× its usual move. The calmest: XLK (U.S. technology), 0.58×.
| MARKET | LEVEL | EXPECTED MOVE | VS USUAL | ||
|---|---|---|---|---|---|
| SPY | S&P 500 | 4 | normal | 0.52% | 1.05× |
| QQQ | Nasdaq 100 | 2 | calm | 0.49% | 0.66× |
| IWM | U.S. small companies | 3 | quiet | 0.57% | 0.84× |
| DIA | Dow Jones | 3 | quiet | 0.41% | 0.81× |
| EFA | developed markets outside the U.S. | 3 | quiet | 0.52% | 0.89× |
| EEM | emerging markets | 4 | normal | 0.74% | 0.96× |
| GLD | gold | 2 | calm | 0.61% | 0.65× |
| TLT | long U.S. Treasury bonds | 4 | normal | 0.43% | 1.09× |
| XLF | U.S. banks and financials | 4 | normal | 0.52% | 0.90× |
| XLE | U.S. energy | 3 | quiet | 0.73% | 0.78× |
| XLK | U.S. technology | 2 | calm | 0.61% | 0.58× |
| VNQ | U.S. real estate | 5 | lively | 0.60% | 1.12× |
| SMH | semiconductors | 2 | calm | 0.97% | 0.64× |
Level 1 is very calm, 4 is a normal day, 8 is a storm. The expected move is up or down: we never say which way.
Over the next days, volatility is expected to stay about where it is.
The three busiest today, with the range we consider likely for the size of the move (up or down): VNQ (U.S. real estate): about 0.60% today, most likely between 0.12% and 1.71%. TLT (long U.S. Treasury bonds): about 0.43% today, most likely between 0.11% and 1.27%. SPY (S&P 500): about 0.52% today, most likely between 0.11% and 1.58%.
And the next five market days, market by market (level 1 very calm, 4 normal, 8 a storm):
| Fri 30 | Mon 02 | Tue 03 | Wed 04 | Thu 05 | |
|---|---|---|---|---|---|
| SPY | 4 | 4 | 4 | 4 | 4 |
| QQQ | 2 | 3 | 2 | 3 | 3 |
| IWM | 3 | 3 | 3 | 3 | 3 |
| DIA | 3 | 3 | 3 | 3 | 3 |
| EFA | 3 | 3 | 3 | 3 | 3 |
| EEM | 4 | 4 | 4 | 4 | 4 |
| GLD | 2 | 2 | 2 | 2 | 2 |
| TLT | 4 | 4 | 4 | 4 | 5 |
| XLF | 4 | 4 | 4 | 4 | 4 |
| XLE | 3 | 3 | 3 | 3 | 3 |
| XLK | 2 | 2 | 2 | 2 | 2 |
| VNQ | 4 | 4 | 4 | 5 | 5 |
| SMH | 2 | 2 | 2 | 2 | 2 |
The week ahead
Thursday 29 October, 21:00 Milan time · Google earnings (after the close). Markets most exposed: QQQ, SPY. The full story →
Thursday 29 October, 21:00 Milan time · Microsoft earnings (after the close). Markets most exposed: XLK, QQQ, SPY. The full story →
Friday 30 October, 13:00 Milan time · Exxon earnings (before the open). Markets most exposed: XLE. The full story →
Friday 30 October, 21:00 Milan time · Amazon earnings (after the close). Markets most exposed: QQQ, SPY. The full story →
Tuesday 03 November, 21:00 Milan time · Apple earnings (after the close). Markets most exposed: XLK, QQQ, SPY. The full story →
These days tend to move markets more than usual. That says how much, never which way.
Our record
Forecasts written before the day and then checked: 656 right of 1235 (53%). A coin would give about 50%. It is a strict test: a day counts as right only if we said in advance whether it would be busier or calmer than that market's usual day, and it really was. Every forecast is on the Track Record page, wrong days included, so you can judge it yourself.
The last checked days, one by one: Thursday, 22 October 5 of 13; Friday, 23 October 9 of 13; Monday, 26 October 8 of 13; Tuesday, 27 October 3 of 13; Wednesday, 28 October 10 of 13.
Stress Test: the water now
Of 16 broad markets, 12 are calmer than their own usual, 3 about as usual and 1 rougher. The roughest compared with its usual: BRL / USD at 1.83×; the calmest: CNY / USD at 0.23×. The furthest below its peak: BRL / USD, 71.3% below (on 13.4% of its past days it was even further below).
The price of fear
Options work like insurance against big moves: their price tells how big the market thinks the next month's moves will be. Over the last year, the options on Oil asked for the most extra: on average 0.63% a day more movement than really came.
| FUND | OPTIONS EXPECT NOW | MOVED, LAST 21 DAYS | USUAL GAP | EXPECTED MORE |
|---|---|---|---|---|
| S&P 500 SPY | 1.07% | 0.60% | +0.35% | 97% of days |
| Nasdaq 100 QQQ | 1.50% | 1.18% | +0.31% | 90% of days |
| Dow Jones DIA | 1.01% | 0.59% | +0.27% | 96% of days |
| Gold GLD | 1.44% | 1.05% | +0.09% | 56% of days |
| Oil USO | 3.69% | 1.90% | +0.63% | 81% of days |
All values are the size of a typical day, up or down. Measured Wed 28 Oct, 23:10 (Milan). It says how big moves were priced, never which way.
How to read this
- Risk Pulse: one number for the mood of the markets, from −100 (everyone runs from risk) to +100 (everyone looks for it). Around 0 is neutral. It describes the mood now; it never says where prices will go.
- The pattern: what is moving together right now: risk-on, calm, neutral / mixed, crypto stress, risk-off, flight to quality, liquidity squeeze, stagflation, bull trap, bear trap or exhaustion. The words after it are the moves that set it.
- The data sources: the Risk Pulse is built from independent data feeds. When they agree, the number is sturdier.
- Level 1 to 8: how much a market is expected to move today, compared with its own history: 1 very calm, 4 a normal day, 8 a storm.
- Expected move: the typical size of today's move, up or down, in percent. 0.52% means a move of about half a percent either way.
- Vs usual: today's expected move divided by the market's usual one: 1.00× is usual, 1.12× is 12% more than usual, 0.66× is a third less.
- Our record: every forecast of the size of the move is written before the day and checked after the close: right means we called correctly whether the day would be busier or calmer than usual. A coin would score about 50%.
- The price of fear: options work like insurance against big moves. "Options expect" is the move their price asks for, as the size of a typical day; "usual gap" is how much more (or less) than what really came, over the last year. It never says which way.
- Stress Test: the water now: each broad market compared with its own long-run usual roughness: below 0.8× is calmer than usual, above 1.25× rougher. "Below its peak" is how far it stands under its highest point so far.
- Our data feeds: the Risk Pulse is computed separately on each of our independent data feeds, called by a letter. The number you read is the weighted one; each feed is shown so you can see whether they agree.
- U.S. futures overnight: contracts on the U.S. stock indexes that trade almost around the clock. The level 1 to 8 compares their move since the last daily close with a usual day. It is what already happened, never which way.
- The currents: the markets we follow grouped by kind (stocks, rates, currencies, commodities, credit, crypto, volatility). For each group: the share of its readings that are rising, how many are up or down, and whether the data feeds agree.
- The next five market days: the expected level of movement for each market on each of the next market days, from 1 (very calm) to 8 (a storm). Size only, never direction.
- The week ahead: scheduled events that usually move markets more than a normal day, with how much the market moved on such days in the past.
The level colours: 12345678 from very calm to extreme.
— Written by the Nostromo, our AI desk, from live data only; approved after automatic checks. Published 09:00 Milan time.