Investors in the US are getting ready for November’s retail sales numbers. Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning:
Good Morning! US Futures are mixed, giving up overnight gains as Europe sinks red and flows continue into Bunds. US Markets are basically unchanged — while overseas the FTSE is off 60bp in heavy volume as the Miners are off 2.5% on average. The DAX is off 30bp in 1.5x normal volume, Materials sector to blame again. Europe’s eye are on Greece, where polling numbers point to Syriza holding a 5-point lead, pressing Athens to a 4% loss with Banks under sharp pressure. Over in Asia, Russia’s stock market coming under pressure as they raised rates by 1%, but couldn’t stop the Ruble from hitting fresh lows. Over in Asia, The Nikkei was off over 2%, but mitigated most losses as the Yen weakened overnight as weak machinery order data sparks dovish hopes — Turnover and Volatility in China calmed down as China injected cash into their Banking system — While to alleviate a liquidity crunch (Sucking money from Credit), some will view this as another easing step. Aussie cut a 1.5% loss in half, as employment there surged above expectations despite the resource angst.
Germany’s 10YY has broken downside of 66bp as flows continue to be heavy into Bunds from Europe — This, coupled with “Flattener” trades, has the US 10YY under 2.15%, taking out November lows. There was some FX volatility overnight: RUB breaking down; Oil exporter Norway unexpectantly cut rates to a record low 1.25% – Their krone dropped to 5Y lows; Bank of Korea kept rates at a record low 2% as the momentum of their recovery “does not appear strong” (Won jumping — not good); and the Euro is stronger to $US despite TLTRO takeup less than expected, sparking dovish chatter. The DXY is basically unchanged as we await retail sales — and commodities are mixed. Brent and WTI are up ~1%, but coming off highs of the day — Metals are mixed, with Copper in the green, but Gold under some pressure as global breakevens drop. Scheduled catalysts today include Advance Retail Sales and Weekly Claims at 8:30; Business Inventories at 10, Natty data at 10:30, and a 30Y reopening at 1. We will get headlines from congress as tonight is facing the funding deadline. Still no Fed Speak scheduled, as they are in the quiet period ahead of FOMC next week
If S&P is down again today, it would be 1st 4-day losing streak of the year. There has never been a year where S&P 500 did not have one (Bespoke). Watch IWO – Growth outperformed well yesterday, basically staying in line with Value — Copper has a bid this AM, let’s see in any rally if Growth (IWO) leads the Russell (IWM). We have the LC IPO today, but Investors playing China social media will be watching pricing of MOMO tonight (BABA big owner). Focus on Retailers into Advance Retail Sales today,the drop in Gasoline will disproportionately help the lower-end retailers. The street is expecting the Spending Bill to pass the House today, keep an eye on headlines about any Dodd-Frank provisions, the fins were under pressure yesterday as not as many regulations will be “rolled back” as others — and finally keep an eye on those TX/ND Regional banks — TCBI, HBHC, IBOC and CFR.
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