Stocks dip back lower ahead of US trading

In case you missed the latest headline debacle in markets:

• China white paper on US trade says willing to communicate on issues such as economy, trade
• US futures pare losses on China headlines

US futures were down by around 1.5% prior to that before jumping higher with Nasdaq futures even being up a little over 1% at one point. All that thanks to some read on the headlines above.

The bounce held somewhat during European morning trade but it was more of a feeling that dip buyers were hoping for some added announcement from China to support their gambit.

That doesn't look to be coming and now we're seeing stock futures fall back lower again. S&P 500 futures are now down 0.9% with major indices in Europe down by 3% across the board.

Don't get me wrong. This is a market that is desperate for a good headline on tariffs or trade to capitalise on. But trying to spin something that is not, by bottom fishing and then praying is not quite the answer.

That especially when we are seeing distressing signals in broader markets with Treasury yields spiking amid funding stress and CDS blowing up amid credit stress. Those are signals that you can't just blatantly ignore.

We'll have to now see what Trump wants to do in US trading later. Besides that, watch out for the 10-year Treasury auction. That's going to be another tell on how much the latest selloff is impacting liquidity and funding.