Dave Lutz, the head of exchange-traded funds at JonesTrading, has an overview of what’s happening in markets on Wednesday. In brief:
- The S&P 500 and Nasdaq are on track to open at new highs, adding to the records attained on Tuesday. Dow 20,000 watch is back on.
- The US 10-year yield is higher and nearing 2.5% as inflation expectations continue to increase. President Donald Trump’s focus on infrastructure has helped stoke these expectations. Trump tweeted Tuesday that he would today sign executive orders on border security, which could include directing the construction of a border wall with Mexico.
- In economic data, the FHFA house-price index will be released at 9 a.m. ET, while the Department of Energy will publish weekly oil inventory numbers at 10 a.m. ET.
Good Morning! Spoos and Nasdaq adding to record highs, while the cats on CNBC will have their Dow 20,000 hats out again today. Russell up 40bp and SPX 30bp in early action as the “Trump Infrastructure Trade” starts another leg. Europe having a strong day, led by Banks and Miners — DAX up 1.2%, but Earnings and Yields have those Banks ripping 2.5% higher across the continent. In London, FTSE lagging the rally as the Pound rallies and profits are taken in the Miners. Volumes are STRONG in thisa rally, with most exchanges trading 50% heavier than normal. In Asia, Nikkei ripped 1.4% higher on strong Japanese Trade data – Aussie up 40bp as BHP and RIO climbed 3%+ ahead of tomorrow’s holiday – Hang Seng up 40bp while Shanghai up 20bp as trading thins, and India saw a 300-point surge on Options expiry ahead of holiday tomorrow.
The US 10YY is up small and nearing 2.5% as peeps eyeball bubbling inflationary pressures on the Infrastructure plans – DXY under pressure but seeing multiple 100 bounces in the overnight – Pound moving toward 6 week highs ahead of May-Trump summit – Weaker IFO being shrugged off as Euro rallies — Peso off small, but may accelerate into the Trump Headers later, while the A$ hit on weaker inflation data. Ore resting near 2year peaks, but other Industrial metals are consolidating recent gains here – Gold nearing a $1200 test as havens reverse. Weakness across the board in Energy – Oil down 60bp, being led by a 1.3% drop in Gasoline as API last night showed a huge build.
Ahead of u today, FHFA House Price Index at 9 – Bank of England Bond-Buying Operation Results at 9:50 — at 10:30 we get that DOE data for Crude, Gasoline and Distillates (API last night showed U.S. Crude Stockpiles up 2.92mm — but BIG builds in refined goods: Gasoline stockpiles a HUGE Build, up 4.85mm while Distillate supplies UP 1.93mm.) BOE’s Carney Speaks at 11, just before the 11:30 US Treasury auction of 2Y floaters — and at 1pm the US Treasury will auction 5-year notes. Today we get unlocks from ABEO, AKS, APOP, EVOK, LTEA, RWLK, TLND, and after the close numbers from LVS, EBAY, LRCX, QCOM, T, WDC. Down in Washington, at 8am – House Ways and Means Cmte Chairman Kevin Brady participates in Financial Services Roundtable discussion on tax policy overhaul.