Dave Lutz, the head of exchange-traded funds at JonesTrading, has a brief overview of what traders are watching on Thursday:
- As US stock futures start the trading day under some pressure, the FTSE in London is trying for a 13th straight all-time closing high. However, pharma stocks are weighing down the index following President-elect Donald Trump’s comments Wednesday on the bidding process for drugmakers.
- Treasurys and bunds are rallying, while the dollar continues to decline after Trump did not dive into policy specifics during the presser, Lutz says.
- In economic data, initial jobless claims will cross at 8:30 a.m. ET. We’ll hear from four Fed officials, including from Chair Janet Yellen at a town hall with educators at 7 p.m. ET.
Good Morning! US Futures are under some pressure, with the S&P down 20bp, and Russell off 30bp as the weaker $ sparks reversal in small caps. Europe weaker mostly across the board, Healthcare a big weight, and there is no sector in the DAX that is higher, hitting the German Market for 60bp in heavy volume. FTSE is trying for a record 13th ATH close, helped by a bid in Retail and sharp covering in those Miners, but weakness in Pharma weighs down the FTSE. Pharma whacked in Asia on Trump’s comments – Hong Kong and Shanghai lost ~50bp – Aussie closed near unchanged as Materials shares rallied, while Nikkei lost 1.2% as Pharma got hit and Exporters were under pressure on a surging Yen.
Sharp bid this AM for Bunds and treasuries, with the US 10YY under yesterday’s floor and nearing a 2.3% test. DXY under pressure and thru 50dma as Trump’s presser didn’t mention Infrastructure or Tax Policies – Eurozone industrial production surges, pressing Euro to 1M highs, while Sterling rebounding from the week’s whack and the Peso rebounding from recent haemorrhaging. Platinum is jumping on China headers, while Copper is shrugging off Indonesia to gain nearly 1% as China rebar, iron ore futures extend rally, up for 4th day. Gold back over $1200 — 7 week peaks. Energy bid across the board, with Natty up 2.5% ahead of Inventories later today and headers of record Chinese car sales, OPEC Cuts and a ramp in US Exports all supporting Oil.
Ahead of us today, we get ECB Minutes at 7:30, then 8:30 brings not only Weekly Jobless Claims, but 3 FOMC Speakers — Harker, Evans and Lockhart. 10:30 we get the Natty Gas Inventory data, then Agriculture players focus on the USDA WASDE Data at 12. Fed’s Lockhart Speaks again at 12:30 — then attention turns to the $12B 30Y auction after yesterday’s strong 10Y shot yields lower. Fed’s Bullard Speaks in New York on U.S. Outlook at 1:15 — then tonight we get Yellen addressing a town hall with educators at 7pm tonight. Focus will be on the Numbers from BAC, BLK, JPM, PNC, WFC tomorrow AM.
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