Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- Futures are rebounding and stocks are on track for strong gains at the open.
- President Donald Trump is set to unveil his $US1.5 trillion infrastructure plan Monday.
- History suggests this stock market volatility will hang around for a while.
Good Morning! US Futures are rebounding from last week’s slide, with the Spoos up 1% on the heels of a pile of M&A chatter (GD for CSRA, CMCSA looking at FOX, AMGN on the prowl). Futures popped a hour ago when China M2 posted stronger, helping the e-minis get back upside the 100d. Europe is rebounding from worst weekly selloff in 2 years, with the DAX climbing 1.7% as EU’s VIX drops 18% overnight. Commodity Stocks are leading to upside, but those Banks are climbing 2% in Frankfurt. FTSE up 1.2% with all sectors up 1%+ and Glencore, Rio and BHP all up ~3%+. Volumes dropped off pretty good in Asia, where Japanese Markets are closed for Holiday and travels begin for the China New Years – Smallcap Shenzhen jumped 2.6% and ChiNext 3.6% – Hang Seng lost 30bp as China Banks got hit again – KOSPI up 90bp as Sammy jumped 2%+, and Aussie lost 30bp as gains in Miners offset by drops in Consumer and Banks
As we await today’s release of the Budget and Infrastructure Plan from the White House, that 10YY is nearing 2.9% as Bunds continue to be sold. The DXY is back under pressure, but Euro was rejected from $US1.23 overnight. Dollar’s losses are against the British Pound, and Korea’s Won as the North extends an Olive Branch to the South. Ore basically unchanged, holding last week’s 2% gain, but Copper rebounding from a sloppy week, adding 1.4%. The Dollars weakness is boosting Gold, while that Energy complex is up sharply following Oil’s biggest weekly loss in years. WTI up 1.7% despite OPEC upgrading supply forecasts, but Natty is falling under some pressure, dropping 1% as warmer weather bathes the NorthEast. Softs all strong, with Wheat and Beans nearing +2%