Dave Lutz, head of ETFs at JonesTrading, has an overview of markets this Monday:
- European markets are higher this morning because of a big investor buying into Nestle and two Italian banks getting bailed out.
- London Markets are being strained, in part, by a huge hedge fund shorting the supermarket Tesco.
- Gold shed $US20 in a couple of seconds.
- Oil is up slightly for the third day in a row.
Good Morning! US futures are ticking higher, led by a 40bp pop in Nasdaq as Semis and Biotech run higher. A big sea of green across Europe, with Food and Bevvy stocks loving the headers of Loeb into Nestle and Banking stocks jumping after two Italian banks are bailed out. This has Italy’s MIB up almost 1.5% and Germany’s DAX up 80bp. London’s gains more limited as Pound rallies and Tiger Global shorting Tesco headers roll. Volumes in Europe look abysmal, with most exchanges trading 20-40% as “Trading was slow with many markets in the region closed for holidays to celebrate the end of Ramadan” noted Reuters. In Asia, Hang Seng was up 40bp, while Shanghai kept adding to MSCI inspired gain, climbing 60bp – Nikkei closed basically flat as Takata files for Bankruptcy, and the big Fins struggled. “The biotech heavy Mothers index +2.2% continued to standout” noted our Asia Desk – Tech gains propelled Taiwan up 1.3% to fresh 27year highs as Hon Hai rips higher – Aussie up small as Retailers rallied.
The US 10YY is up 1bp despite Germany’s 10YY dropping a bit. Euro is shrugging off Germany’s IFO, with the FX dropping away from 1.12 in the overnight. The DXY is making gains also against Yen, while commodity currencies like Aussie are seeing a rebound. There was some big liquidation in Gold on the London open as IFO printed and chatter built about India curbing ownership. Ore was off small, but Rebar jumped 1.5% – but Platinum and Silver are getting whacked for 1%+, while Copper tries to hold a bid. Oil up for 3rd day in a row, but very slight right now, while Natty continue to rebound, climbing 2% early.