Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- The US Senate passed the GOP’s tax bill last night, but the House will have to revote on Wednesday due to procedural issues.
- Global markets are mostly in the red.
- Bitcoin slipped below $US16,000 early on Wednesday but has since recovered most of its losses.
Morning! US Futures are higher, led by a 40bp pop in Russell, after the Senate passed the Tax Bill last night (due to procedural issues, the House must vote again this AM) – but the headers say “Congress Dives Into Shutdown Drama Hours After GOP Win on Taxes” as the Friday deadline for a deal looms. Transports looking for a nice day w/ FDX up 2%+, while Tech is rebounding from yesterday’s weakness. Mostly red in Europe, with the DAX off 15bp as Utes and Telecom are still reeling from yesterday’s yield surge. Spain underperforming ahead of the Catalan poll tomorrow, with IBEX off 60bp. London outperforming as Miners continue to rally. Volumes light, with FTSE’s turnover 30% below average. In Asia, Nikkei added 30bp as Fins jumped – Hang Seng lost Small as Tech stumbled – Shanghai down 30bp – KOSPI off 20bp – Aussie up small to 9year highs as banks and miners hold rallies. Volumes were terrible however, with most Asian exchanges trading 25% light
Bund Yields holding yesterday’s biggest gains in 5months on headers discussing a shift from Bond Purchases by the ECB, while the US 30YY is holding yesterday’s surge, the biggest in a year, and the 10YY is nearing yesterday’s peaks. The DXY holding a slight bid as Sterling cannot stay upside $US1.34 – The $/Y thru 113 and the Krona jumping as inflation forecasts were boosted. Ore was up small in China, and we have Copper adding 70bp to trade at 3week highs. Gold is up 30bp despite the $, while the Bitcoin has recovered from a 7% whack in Asian hours to trade 3% higher on the day. WTI adding small as API data showed a much bigger draw into DoE later, while Natty is still enjoying a “polar Vortex” bid.