Here's a super-quick guide to what traders are talking about right now

Dave Lutz, head of Exchange Traded Funds (ETFs) at JonesTrading, has a quick overview of what traders are watching on Friday ahead of the US market open.

In brief:

  • European banking stocks have recovered from their lowest levels in intraday trading. But investors are still on edge over Deutsche Bank’s balance sheet, as the firm faces a possible $14 billion settlement with US authorities over an investigation into sales of mortgage-backed securities. Clients are
  • Gold, Treasurys, the Dollar, and the Swiss Franc are all rallying. These are assets investors typically buy when they’re nervous and looking for safety in the market.
  • Data on personal income and spending, consumer confidence, and manufacturing in the Midwest are all on deck on the last day of the third quarter.

Here’s Lutz:

Good Morning, and Happy Friday! US Futures are off small, recovering from the worst levels of the overnight as European Markets get whacked across the Atlantic. The DAX is off 1%, while some on the periphery get hit worse, as Deutsche weighs on Fin Sentiment. The EU Bank Index is off 2.7%, and DB 4% – but both have steadily recovered from lows set around their openings. At one point BNP, Soc Gen and Unicredit were all off 4%+, but seeing buyers starting to be drawn in. Commodity Stocks are relinquishing some of yesterday’s strong gains, hitting the FTSE for 1%. Volumes are very strong, with German and Spanish exchanges trading 2x normal volumes. In Asia, Nikkei lost over 1% despite the break lower in the Yen – Aussie fell 70bp – China gained 20bp on decent manufacturing data ahead of the Golden week holiday, while India lost another 50bp despite no fresh Pakistan headers.

Havens are acting well, with Gold, Treasuries and Dollar and Swiss Franc all jumping. The Bulk of the $ gains are coming against Euro as the cross breaks downside 1.12, while the $/Y jumped to yesterday’s peaks on disappointing economic data. Mild Signs of stress are being seen in some pockets, with three-month cross-currency basis swaps dropping hard and Peripheral bonds of Greece and Portugal widening out from Bunds — but so far contagion into credit seems muted. Metals are all having a great day despite the $ jumping — Zinc and Silver up 1% and Copper holding green. WTI is rallying from overnight lows and nearing unchanged, while Gasoline remains 1% lower. Softs are mostly lower.

On this last day of the Quarter, we have a light day of catalysts away from single-stock headers. At 8:30 we get August Personal Income — At 9:45 we get the September Chicago Purchasing Manager (Released 9:43 to paying subscribers — Estimate 52) — At 10am we get the University of Michigan Sentiment for September — and at 1pm the Energy complex will focus on the Baker Hughes rig count. 3:30 brings the CFTC’s “Commitment of Traders.”

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