Dave Lutz of Stifle, Nicolaus passes along the top topics about which traders are discussing today:
Good Morning! US futures are unchanged, with the S&P resting at a 2M low after losing 4% in 6 sessions as stress remains the global backdrop – Russia’s Micex is off 1.5% as they mass troops on the Ukrainian border, and the UN Security Council hosts an “emergency meeting” — VIX futures are climbing towards a 1M high, but the 3month curve rests in “backwardation” showing oversold conditions – Europe is under pressure in heavy volumes, with the DAX off 60bp in volumes 30% heavier than 20day averages. The EU fins are getting hit for 2%, led by 10% drop in Italy’s Banca Pop Milano. Over in Asia, the Nikkei lost 30bp, but rests on 6M lows, losing over 7% in the last week — Tokyo’s “Mothers” index of momentum stocks lost 1%, and closed on the lows of the session. Chinese markets were mixed, but Aussie lost over 1% led by a sharp drop in Consumer names. We have over 10% of the S&P reporting this week, with BAC, C, INTC, GOOG, GE and HON slated to report, among others
The 10YY remains near 6week lows, and higher quality sovereigns remain in demand as Wolfgang Schaeuble, the German finance minister, warned that the crisis in Ukraine is the biggest geopolitical risk to the economy. The € is sharply weaker to the $US on Draghi’s dovish comments over the weekend — while the Yen Is breaking down further on reports Abe is to meet Kuroda as economic momentum seems to be waning in Japan. The DXY is higher, causing a headwind for commodities — but we are seeing strong upwicks in Platinum and Gold on the Ukrainian situation, while WTI and Brent remain bid on geopolitical stress and headlines Enbridge’s Northern Gateway Pipeline was voted down as OPEC’s production drops. We have strong upshot in Wheat and Corn, as Ukraine’s exports are beginning to come into question. Ahead of us today, we have Citi earnings any minute — watch the retailers, as we get Advance Retail Sales for March at 8:30, and Business Inventories at 10. We have a small POMO at 11, and the CBO will release its updated 10-year baseline projections of federal spending, revenues, and budget deficits. At 2pm today, ECB’s Noyer, Fed’s Tarullo, IMF’s Vinals speak in New York.