Dave Lutz, head of Exchange Traded Funds at JonesTrading, has a quick overview of what traders are talking about on Tuesday.
- Futures are rising from the lowest level in one month.
- Netflix is ripping higher, up 19% after big beats on earnings and subscriber growth.
- The consumer price index and homebuilder sentiment are on the data calender. Intel and Yahoo are among the major companies that will report earnings after the closing bell.
Good Morning! Spoos trying to bounce from 1M lows, with Futures up 50bp in early action — While focus remains on earnings (FANG Ripper led by NFLX may be tempered by losses in IBM), a sharp bounce in the commodity complex is helping risk appetite. In Europe, the DAX is up 1.1% as Miners lead gains and the Banks break above the 200dma. Consumer is mixed as Luxury split between Burberry and Remy #s. The FTSE is lagging a bit as the Pound gets more upward mojo, and volumes across the continent are pacing slightly light to trend. In Asia, Shanghai rallied over 1%, and those “B” shares recovered almost ½ of yesterday’s whack – Nifty50 reclaimed the crucial level of 8,600 – Nikkei gained 40bp as the yen softened back above $/Y104 – Aussie up 40bp as Miners and Banks outperform, while Philippines jumped nearly 3% ahead of Duerte’s trip to China.
A sharp bid for Bunds and Treasuries remain, pressing the US 10YY back to the 200dma and yesterday’s lows. The DXY continues to pull back from 7month peaks despite a Fresh Renminbi Low, as the Aussie $ popped on hawkish tone from Stevens — the ECB lending survey supported Euro, and GBP rallying as UK Inflation comes in hotter. With the weaker $, Commodities are up across the board as steel rises in Asia, helping Base Metals like Zinc, Platinum and Nickel, while Copper continues to lag. WTI is up 1% and close to yesterday’s highs as we await API tonight, while Natty continues to advance, gaining 1.2%. Softs are all lower across the board.
Ahead of us today, we get US CPI, along with “Real Average Weekly Earnings” at 8:30 – Bank of England Bond-Buying Operation Results post at 9:50, just ahead of the US NAHB Housing Market Index at 10. At 4pm we get Total Net TIC Flows from the US Treasury — Just ahead of that API data for Crude at 4:30 – Overall Supplies Seen Increasing 2.1M, With Gasoline Stocks dropping 1.125M (Bloomies) – Genscape looking for a Cushing draw -2.4M, Plains All American Pipeline outage blamed. Earnings are heavy on Tech post-close, with INTC, CREE, LLTC and YHOO among others.