Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- US markets continue higher.
- European markets are also strong.
- Safe-haven investments continue their retreat.
- Most metals, save gold and iron ore, are popping.
Morning! US Futures continue their upward trajectory, with Russell rebounding 30bp, and S&P up 20bp. Eyes continue on the retailers, with TGT up 6.5% in the pre-market (HD was strong yesterday early too, until it wasn’t). Havens continue to retreat — Gold, Swissie, Sov Bonds and Yen under pressure. Big sea of Green in Europe, DAX up 80bp with Autos acting well behind Fiat, and Airlines are flying. FTSE up 65bp, with Resource Stocks Gaining, while Construction Stocks jumping on Balfour. Volumes still abysmal across the continent, with most exchanges trading ~20% light. In Asia, TOPIX basically unch, but smallcap “Mothers” up 2% on a falling Yen – Shanghai lost small – Hang Seng up 90bp as Tencent jumped ahead of #s, while Chinese Banks and Macau names had solid gains – KOSPI up 60bp and India leapt 1% as they returned from Holiday, and Aussie gained 50bp as Woodside had Oils leaping, and Macquarie’s #s boosted banks
The US 10YY is testing 2.28% in the overnight, as German Bunds get hit on the Euro GDP beat. The DXY is on 3week highs into today’s Fed Minutes, with Headers that Draghi will deliver a watered down speech at JaxHole hit the Euro. Sterling tested (and failed) $US1.29 on better UK wage growth as it tries to rally from 7year Euro lows. Eyes are on the Metals, as Iron Ore Falls to 3-Week Low in China, dropping 1.2% – but that doesn’t stop the rally elsewhere – Nickel up 2%, Lead, Copper, Zinc up 1.5%+ as China continues to clamp down on illegal capacity, pushing Zinc over $US3,000. Other headers point to a ramp in Chinese Construction and Euro GDPs beat. Oil Complex showing a very unimpressive bounce despite API data showing 3x the draw expected, as a pop n Gasoline stocks seems to weigh. Softs are all rebounding from the recent smackdown, which saw Wheat, Corn and Soy losing 4.5%+ in the last week
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