Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- US markets are trading higher even as a potential government shutdown looms.
- Oil is retreating from three-year highs.
- Tech stocks are rallying.
Good morning, and Happy Friday!! All the talking heads focused on a potential US government shutdown, but spoos don’t care, with futures marked up 30bp – Tech acting well in pre-market. Gains in AMD, INTC, NVDA, AAPL and NFLX offsetting a 3% hit to Big Blue as the QQQs climb 50bp. Strong session in Germany, where the DAX is up 1% – Autos ripping again, up 10% in 2018 on average – Tech climbing 1%, and those Banks are staging a rally. FTSE move more muted, climbing 25bp – Oil Majors offsetting a pop in Miners, while Consumer names shrugging off weaker Christmas sales – Sea of Green in Asia – TOPIX up 70bp as Industrials and Real Estate rallied – Hang Seng up 40bp as gains in IT offset drops in the fins – Shanghai up 40bp to 2Y highs – KOSPI added small, while Aussie off 15bp as miners dropped
All eyes on that Treasury market, where the 10YY kissed 2.64% overnight before retreating, threatening Gundlach’s “Red Line” and causing angst across that crowded Bond trade. 10Y breaks are off small, but those TIPs remain in heavy demand – “Dollar near 3-year lows on government shutdown fears” – Euro testing Dec’14 highs as German PPI comes in better – A$ thru 80c – Sterling is shrugging off Weaker UK Retail Sales. The Weaker Dollar helping that Yellow Metal, with Gold adding 50bp early, and it was a green overnight for metals, with Ore up 1.2%, while Rebar added 1.7% in China. Industrial metals Stateside are following suit, with Zinc up 1.8%, Platinum 1.2% and Copper 90bp. Only weakness to be found is in Energy, where WTI and Brent are retreating from 3Y highs