From Dave Lutz, head of ETFs at JonesTrading, here’s a quick guide to what traders are talking about ahead of the opening bell on Tuesday:
Good Morning! AA kicks off earnings season with solid results, STX will have PC chain happy, and XRX for RRD feeds the M&A appetite. Big rally in Italian Banks and chatter of Abe/Kuroda/Bernanke meetings has the doves bidding up equities globally. US Futures are up 40bp to new all-time highs as the DAX leaps 1.5% on the back of Autos (Daimler) and banking shares. Italia All-Share Banks Index +4% on Unicredit headers — while the FTSE up smalls to 11month highs. Over in Asia, Nikkei leapt another 2.5% as Nintendo’s share price surged again, Shanghai rallied 1.4% as Base metals ripped higher, India entered a bull market on dovish chatter, while Aussie climbed 30bp as South32 ripped 5% higher on divvy chatter. All of EM Asia closed in the green in decent volume.
Ahead of heavy Fed speak today, Sov Yields rebounding from record lows with the US 10YY up 4bp and nearing 1.5% as heavy selling in Bunds press German 10YYs back towards -10bp. The DXY is retreating fast from the 200dma (again) as the Pound breaks back above $1.31 as Theresa May prepares to become PM, the $/Y breaking towards 104 as more chatter of “helicopter money” increases, while Euro is retreating slightly. With the weaker $, we have a sharp bid under commodities early as GS goes positive on base metals – Ore back to recent highs as it jumps 7% in China — helping propel Nickel and Copper 2%+ higher. Gold is off small as peeps embrace risk. OPEC’s Market report has WTI up nearly 3% early, while most grains are seeing continued selling.
Ahead of us today, Fed’s Tarullo (Voter, Dove) Speaks in Washington at 9:15, followed by Fed’s Bullard (Voter, Hawk) at 9:35. Wholesale Inventories; JOLTS Job Openings hit at 10 — and at Noon we get World Agricultural Supply & Demand Estimates (WASDE). The DOE short-term crude outlook hits at 12 as well, just before the $20B 10Y auction form the US Treasury. After the close, we get API data for Crude at 4:30, while Fed’s Kashkari (Non-Voter, Bank Hater) Holds Town Hall Meeting at 5:30. Down in Washington, HC players will focus on a House Ways and Means meeting on “Rising Health Insurance Premiums Under the Affordable Care Act” at 10am.