Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- US markets are trading higher on Tuesday.
- Gold is still slipping.
- The energy sector largely outperformed commodities on Monday, so traders are keeping their eyes on the sector on Tuesday.
Morning! US Futures are acting well, with Dow, S&P 500, Nasdaq, Russell 2000 all adding to record closes as we await US Auto Sales and single-stock headers from the SOHN conference in Tel Aviv. Quiet in Europe, with Frankfurt closed celebrating German reunification, while Spain’s IBEX continues to show some weakness, dropping 60bp. Euro STOXX is off small, but volumes are decent, running 30% above trend. London is adding 10bp, With rallies in Fins and Miners being offset by weakness in Consumer. Pretty much a rip higher in Asia, where the TOPIX was up 70bp to 2Y highs — and Hang Seng Ripped over 4% higher before calming down, closing 2.3% higher as Fins and Autos ripped higher in very heavy volume on the Chinese RRR cut. KOSPI up 90bp in thin trade, while Aussie retreated 50bp as Fins were hit
US 10YY continues to hover around 2.35%, and Fed Funds holding near 77% for December. Spains yields tighter to Bunds are tightening slightly, while Germany’s 10YY is up 3bp. DXY weaker as Euro just off 6week lows as the pop in Producer Prices sparked covering, but the A$ off small as RBA holds rates and MS says “go short” and Sterling getting hit on weaker PMI in the Construction Sector. Metals mixed, with Industrials climbing as Nickel 3% higher after LME data, but Gold continues to break lower despite the dollar drop. Headers of higher OPEC output continue to weigh on WTI, which barely held $US50 yesterday. Will be interesting to see action in Energy Stocks, which broadly outperformed the commodities yesterday
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