Dave Lutz, the head of Exchange Traded Funds at JonesTrading, has an overview of what’s happening in markets on Tuesday:
- US stock futures are rallying and setting the major indexes up for a second straight day of record highs. European indexes are higher across the board. Financial and mining stocks are surging on the UK’s FTSE. Japan’s Nikkei closed higher even after the earthquake that struck off the coast of Fukushima.
- Crude oil is little changed after a 4% jump on Monday. Several OPEC members indicated at a meeting on Monday that they would be more willing to reach an agreement on production limits when the gather at the end of November.
Good Morning! Spoos, Russell and Nazzy all breaking above yesterday’s record closes early, but a retreating WTI and renewed bid into Treasuries have Futures coming off peaks. It’s a Sea of green across Europe, with the DAX adding 60bp as the Fins jump nearly 2%, while the FTSE is ripping 1% higher as the Miners are on Fire — Anglo up 5%, BHP 4% and Rio 3%. The only market red is Switzerland, where Luxury hit as Swiss Watch Exports collapse sharply. In Asia, investors were rattled by two earthquakes, with a 7.4 magnitude quake that struck off the coast of Fukushima prefecture in Japan and a 5.6 magnitude tremor off the north island of New Zealand. TEPCO reported no abnormalities at its nuclear plants. Nikkei still closed 30bp higher, Hong Kong leapt almost 2% as Casinos continued their trajectory, while the Philippines were whacked for 2.5% as property shares got hit.
The DXY is under pressure against Pound, Euro and a rebounding Aussie$ as the 10YY breaks below yesterday’s lows under 2.3%. Bunds seeing a sharp bid, driving their yields off almost 5bp, but JGBs continued to defy the BOJ, with Yields closing slightly higher overnight. Ore in China ripped 5% higher, hitting “Limit Up” as winter weather skews the contract higher. Copper is up another 1.3%, and even Gold is higher slightly this AM. Oil is basically unchanged as more headers come out of OPEC, and traders eyeball the $50 resistance level. Natty gas is coming under pressure after the recent 10% rip higher, while Softs are mostly lower.
Ahead of us today, we get Canadian Retail Sales at 8:30 – Bank of England Bond-Buying Operation Results at 9:50, just before US Existing Home Sales for October, the Richmond Fed Manufacturing Index and Eurozone Consumer Confidence at 10. At 1pm, the US Treasury sells 5-Year Notes, and after the close we get API data for Crude. South of the border, Mexican Equity Exchanges are closed today for Holiday.