European Markets Rocked for 2.5%; U.S. Futures Plummet as ‘Negative Feedback Loop’ Worsens

The Dax is off by 2.7& and NASDAQ futures are lower by 62, Dow futures off by 170, as the ‘negative feedback loop’ of a worsening Fed stance on monetary policy, Oil, and China (FOC’d) weigh on the minds of investors.

The dollar is higher by 0.4% v the euro and breakfast hasn’t even been served in Princeton, NJ yet.

At the end of the day, this week is all about Yellen’s testimony. There is a growing consensus out there that she will dig in her heels on a March Fed rate hike, which is sure to leave traders astounded with elephantine losses.

“I don’t think we should expect Yellen to throw the towel on a March hike,” said Thomas Costerg, a senior U.S. economist at Standard Chartered Bank in New York. “She may emphasize the positives in the U.S. economy, particularly the still-strong labor market. Looking ahead, she may sound more cautious, and she will likely highlight that the negatives are mostly from abroad and that they are watching the global picture closely.”

Yellen talks Wednesday.