VIX Volatility Index Highest Since Middle of June

On Wall Street, the bearish sentiment is apparently persisting. Goldman Sachs (GS) and BlackRock (BLK) are warning that markets are yet to price in the risk of a global recession: one of their latest research papers now sees a 98% chance of a looming global recession. Meanwhile, a former Chinese central bank official warned that the Federal Reserve’s most aggressive interest-rate hike cycle since the 1980s is destabilizing global financial markets and harming other economies.

Having said all that, the U.S. stock futures are heading for a higher open today following yet another rout a day earlier. All in all, U.S. stocks are on their five-day losing streak, and the blue-chip Dow Jones Industrial Average is in a bear market, having dropped more than 20% from its record high. The VIX Volatility Index on Monday hit its highest level since the middle of June, the last time markets were in the pits this year. In Fed world, where policymakers are keen to squelch price increases with rate hikes, Cleveland Fed President Loretta Mester said inflation was still “unacceptably high.”

Chicago Fed President Charles Evans, meanwhile, said he’s a little nervous about how fast and boldly the Fed is moving, but noted he’s “cautiously optimistic” the U.S. can avoid a recession. On the macro side, today in focus will be data on durable goods orders for August (to be released at the market open). Consensus estimate for durable goods orders is to decline 0.4% in August following a 0.1% drop in July. The S&P Corelogic Case-Shiller home price index and the FHFA's house price index for July will be released at 9:00 a.m. EST. The Conference Board's consumer confidence index, Richmond Fed's manufacturing index and data on new home sales for August will be released at 10:00 a.m. EST.

European markets are in a shy rebound mode today. As of 3:45 p.m. CET, the Stoxx Europe 600 Index gained 0.58%, the British FTSE 100 crawled higher 0.13% while the French CAC 40 Index rose 0.42%, and the German DAX gained 0.29%. Loans to households in the Eurozone climbed 4.5% YoY in August. UK markets stabilized overnight after one of the worst days on record for sterling and gilts. Bond markets have had a terrible year everywhere, but the fall in UK debt this year, at 27%, has been one of the worst. Speculators are betting there's worse to come, with option markets implying a 43% chance the pound will hit parity with the dollar before the end of the year.

Asian markets traded generally higher earlier today. Japan’s Nikkei 225 rose 0.53%, Hong Kong’s Hang Seng Index rose 0.03% and China’s Shanghai Composite Index climbed 1.4%. Australia’s S&P/ASX 200 rose 0.4%, while India’s S&P BSE Sensex rose 0.1%. Profits earned by China's industrials fell by 2.1% on an annual basis to CNY 55.25 trillion in the first 8 months of the year.