But by Monday afternoon, things are looking relatively calm.

What happened?

The news of the day, attributed to the calmer tone, was some ambiguous commentary on China trade negotiations.  But it probably had as much to do with the call out to the banks that the President and Treasury Secretary made about 10 days ago (to “assure normal market operations”).  And with a meeting that Trump had with Abe over the weekend, the leader of Japan and the commander of biggest and boldest QE program left in existence (within which, is a mandate to outright buy stocks). 

With that, both the U.S. banks and the Bank of Japan were likely the stewards of global financial market stability overnight (i.e. the plunge protection team).  

Of course, U.S. stocks remain an important barometer of global economic sentiment.  And, on that note, we start the week with what seems to be a healthier head-space than we ended last week (with stocks about 5% off of all-time highs, despite some very ugly risks). 

But two spots will be key to watch, for signals on whether the mood might be calming:  1) The Chinese yuan traded to another 11-year low overnight.  The weaker the PBOC sets the yuan, the more aggressive retaliation signal they send to Trump.  And 2) The U.S. yield curve (10-year/2-year) inverted just briefly a couple of weeks ago (fueling recession talk).  Today, it was inverted much of the trading day.