Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about this morning.
Good Morning! US Futures are starting the day on the right foot, with the S&P, Nasdaq and Russell all up 40bp+, impressive given AAPL off 1% and DIS 7%, but flows moving fast into “New Economy” stocks like NFLX, Z, FSLR, LC and PCLN as earnings reports spark buying. Euro markets are much stronger, as investors chase accommodative Central Banks — the DAX is up 1.3% as consumer discretionary shares shrug off weak EU Retail Sales, and a bounce in commodities has materials up nearly 2% with industrials just behind. Athens remains under pressure, losing 3%+ as Greek banks are still tumbling hard — Alpha, NBG and Piraeus have lost 60%+ this week. Growth in China’s and Japan’s services sectors propped up most Asian markets, but despite being coupled with headlines “China issuing $US164B in Bonds to stimulate economy”, Shanghai closed down 2%. The Nikkei gained 40bp as the Yen broke lower, while Aussie lost small despite bounce in the mining shares.
Lockhart comments have the street prepping for September liftoff – dollar and short-term Treasury yields are eyeing multi-year highs – Fed Funds has moved to 50% chance of a September Lift – we get comments from Fed’s Powell (Voter, moderate like Lockhart) on CNBC at 7:30. Hawkish US expectations killing EM again, with Malaysia’s ringgit falling to a fresh 17-year low and Indonesia’s GDP growing slowest in 6 years. Despite the $US strength, the buying continues in the Oil complex as API showed a draw of 2.4 million barrels (expectations draw 1.6M) ahead of DOE today. The Metal complex is showing little life in this hawkish breeze, Gold hovering above 6Y lows and Copper off 75bp despite “robust” data on China’s services sector.
Scheduled Catalysts today include Fed’s Powell at 7:30 on the tele, just ahead of that ADP Employment Change at 8:15 and US Trade Balance at 8:30. Markit PMI at 9:45 — then at 10 we have the Online Help Wanted Index, US Services PMI, and Fed’s Powell speaks again on the “Structure and Liquidity of Treasury Bond Markets”. DOE data for Crude posts at 10:30. Down in DC today, the Senate in session, House on summer break – Obama delivers speech at American University on Iran nuclear agreement at 11:20 — all ahead of the GOP debate tomorrow night.