Dave Lutz, head of Exchange Traded Funds at JonesTrading, has a quick guide to what traders are talking about on Tuesday.
- Stock futures are slightly lower. Alcoa unofficially kicked off earnings season and reported profits that were lower than expected.
- The dollar is surging towards four-month highs against other major currencies, while the euro is falling and Brexit fears continue slamming the pound.
- Crude oil prices are pulling back from one-year highs after the International Energy Agency said OPEC production hit a record in September.
Good Morning! US Futures are under some pressure, losing 20bp as we await AA to kick off earnings Season this AM. It’s a sea of Green in Europe, with Fins reversing early losses, and Luxury acting well on back of LVMH #s — while Tech and Energy shares are leading to the downside. FTSE is lagging a bit as UK Fins grapple w/ Brexit headers, offsetting a pop in those exporters. Volumes relatively muted, with most EU exchanges trading 10-20% light to trend. In Asia, Re-opening from a 3day weekend, NIkkei leapt 1% on the falling Yen – Shanghai added 60bp but Hang Seng fell 1.3% as Chinese property stocks continued to get whacked after the weekend headers – Aussie climbed small as Energy shares offset losses in the Big Fins, while the KOSPI was hit for 1% as Samsung got whacked.
We have a full DXY ripper towards 4month highs as Evans (Huge Dove, Non-Voter) chattered a December increase and Trump implodes in the polls — while that 10YY thru 1.77% and on new 4month+ peaks. The Euro is dropping fast below 1.11 despite a better German ZEW, while those Brexit hard-landing fears smacking the Pound again. Ore rose 2% for a 2nd day in a row in China, but all other metals are firmly red this AM, led by a 2% drop in Zinc and 1% drop in Silver. Oil is retreating from 1Y highs as IEA says OPEC production hit a record in September, while Gasoline is dropping 1% as the street awaits API data later tonight.
Ahead of us today, we get Canadian Housing Starts at 8:15 – Bank of England Bond-Buying Operation Results at 9:50 – Fed’s Kashkari Speaks at Town Hall in Arden Hill, MN at 11 – ECB’s Mersch Speaks in New York at noon right when World Agricultural Supply & Demand Estimates hit. At 4:30 we get the API data for Crude, Gasoline and Distillates, and Yom Kippur begins at Sundown. Earnings season begins with AA today, but all eyeballs are on the big US banks reporting later this week.