Financial Markets Today: Quick Take – July 25, 2022 Recession fears are riding high after preliminary July PMI surveys out Friday suggest that the Eurozone economy is on the brink of recession and that the US services sector is in contraction. US treasury yields tumbled all along the yield curve late last week as the market lowers the anticipated peak Fed funds rate and sees easing inflation. Equities finally rolled over in Friday’s session after their recent squeeze higher as investors weigh recession risks and ahead of a slew of earnings reports from the largest US companies this week and the FOMC meeting on Wednesday. What is our trading focus? Nasdaq 100 (USNAS100.I) and SP 500 (US500.I). US equity futures rolled over Friday from new local highs after the recent squeeze higher that was driven in part by excessively negative sentiment. While a sharp drop in treasury yields late last week has brought some relief as the peak Fed Funds rate was marked lower, the recession fears driving the drop in yields are a concern for corporate earnings, which were also challenged in the second quarter for US companies by the very strong US dollar.