Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- The jobs report is released on Friday morning.
- Congress decided to delay a government shutdown by two weeks.
- Bitcoin is slipping off its highs of more than $US16,000.
Morning, and Happy Jobs Friday! The street is at 195k, with the “whisper” closer to 220k. We are full “Risk On” as Congress passes a 2week spending bill, the UK/EU have come to terms on Brexit, and China posts strong trade figures. QQQs leading to upside again, adding 40bp early, while those smallcaps are lagging the bid. Wide sea o Green across the Atlantic, as DAX breaks out, gaining 1.3% behind a Huge Rally in EU banks on the Basel III post-crisis capital rules announcement. Tech remains well bid, but Consumer gains tempered by another drop in Steinhoff. FTSE adding 30bp with Banks jumping in London, with Barclay’s, Lloyds up 3%+, Builders enjoying headers from Berkeley, and even Miners are rallying. Volumes are strong – with most major exchanges pacing 40% above trend. In Asia, Nikkei jumped 1.4% on a upwards GDP revision – Hang Seng rebounded 1.2% – Shanghai up 50bp, with smallcap Shenzhen up 1.2% – KOSPI up small and Aussie up 30bp
While we are waiting to lock down Fed next week (odds for hike at 92%), we have 2Y Gilt Yields leaping towards 18month peaks on a Brexit Breakthru, but it seems to be a “sell the News” for Sterling. Weaker industrial production weighs on Euro, further propelling the Greenback. Gold remaining under pressure, and nearing yesterday’s 4month lows, while the Bitcoin is off 7%. Commodities are acting OK, with Ore rebounding 2.4% from yesterday’s Limit Down action, paring week’s decline to ~4%, while Copper continues minor gains. WTI is up 1.2% despite the surging dollar, while Natty is rebounding from the recent shellacking as Traders awaken to Snow in Houston.