From Dave Lutz at JonesTrading, here’s a brief guide to what traders are talking about on Friday morning:
Good Morning! US Futures are angry this AM, as China headlines, INTC #s, BHP Writedown and Crude dropping 5% weigh on sentiment into this morning’s Options Expiry. SPY is off 1.5% and Nasdaq 1.7% as multiple mega-caps drop 3%+ (INTC, FB, NFLX, AAPL, SBUX, INTC). Options Expiry is skewing things further — so let’s look for a possible reversal between the heavy economic dump at 8:30, and the “gamma Roll Off” into the 9:30 equity open. Euro markets are not as stressed, but all firmly red as Basic resources are leading Europe lower — DAX off 1.5% in heavy volume once again. Miners hit in London as BHP takes a huge write-down and Anglo drops sharply. Over in Asia – Shanghai hit for 3.5%, taking it 20% off in 3 weeks and below August Lows as reports of collateral restrictions abounded – Japanese gains faded as hawkish Kuroda headlines worsened sentiment — Aussie actually outperformed tho, losing “only” 30bp — while Taiwan managed a positive close into Elections this weekend.
Haven Trade has Gold big up 1% this AM, and the bid under Treasuries has the 10YY nearing October Lows on its decent towards 2%. The DXY is unchanged against the basket early, as Euro and Yen make gains, offsetting weakness Commodity currencies, such as the Australian, Canadian and New Zealand dollars. All Base metals are weaker (China), while Crude Oil smashing 5% lower as Brent expiry covering fades and $30 gives in WTI. Headlines of a big Iranian export ramp and IAEA report that could lift sanctions not helping the complex whatsoever into Rig Count later this afternoon. Grains are starting this Friday mixed.
Ahead of today, we have a slew of Banks reporting numbers pre-open (BLK, C, PNC, USB, WFC — RF #s better than feared, important due to energy exposure). At 8:30, we get Retail Sales Advance, PPI, Empire Manufacturing ahead of a Dudley speech at 9. Industrial Production and Capacity Utilization hit at 9:15, followed by Business Inventories and U. of Mich. Sentiment at 10. Oil complex will be focused on the Baker Hughes Rig Count at 1pm. At 3:30 we close our week with “Commitment of Traders” data from the CFTC. Down in DC, at 10 am Interior Sec. Sally Jewell holds 10 am conference call to announce moratorium on new coal development on public land while it conducts study of environmental effects of U.S. leasing program.