Dave Lutz of Stifel, Nicolaus passes along the top topics about which clients are talking about today.
Good Morning! US Futures are meandering along what many hope is the “Floor”, the 100dma in the E-minis, as they gain 30bp. Nasdaq Futures fare better on the back of Earnings — adding 40bp, and remain almost 3% above their 100dma. Bear markets close higher than where they opened. Thus far in 2014, the SPX has closed below our opening 12 times, and above 7. Euro markets are slightly red, with the DAX off 30bp (had been off 1%), and some periphery countries nearing unchanged. Over in Asia, The Nikkei was hit for 2.5% on a surging Yen and their Retail Sales print light ahead of heavy data tonight, while China retreated nearly 1% as their PMI printed in contraction, a first in 6 months. Volume is weak in Europe (Selling exhaustion?) and Asia (Some exchanges closed for Holiday) — but of the 26 Global sectors moving overnight, only German Industrials and EU banks are in the green. Banks, Property and Materials stocks the biggest losers. Single Stock movers include FB +13% (#s), FLEX +10% (#s), TWTR +6% (FB #s), GOOG + 3% (Moto Sale). Losers include CTXS -8% (Multiple d/gs), MOS -1% (POT #s). We have over 10% of the S&P reporting today. COP, V, MMM, UPS, XOM, PHM among those this AM, while we see GOOG, AMZN, BRCM tonight.
Looking at the EM angst — we have some stability in the countries making headlines this week — with the Brazilian Real jumping against the Dollar and the Rand trending better as well — while Turkey’s Lira meanders around unchanged, after testing yesterday’s lows in the overnight. Seems the sharks have moved on (for the moment) to Hungary, where their Forint is getting smacked hard this AM (HUFUSD the cross).
The US 10YY is slightly higher this AM, but has been rejected from 2.7% several times in the overnight. The strong bid in Bonds coming from Safety, Pension rotation, Asian Demand on Yield Differential, and positioning from heavy shorts. We do have heavy supply today — 2 auctions – $US35B in 5’s at 11:30, and $US29B in 7’s at 1. The DXY is higher, making some gains against € and Yen (Nikkei futures unch tho) — causing a headwind for commodities. All eyes remain on the Natty complex, which surged 10% yesterday in a squeeze on expiry of the current contract — as players tried to lock in prices for February with another “Polar Vortex” approaching — the reversal of that stress buying has the March future off 4% early ahead of the Inventory data at 10:30. Both WTI and Brent have a bid, but we are seeing weakness in Metals — primarily industrials, as that China PMI number weighs. Aside from the aforementioned, we get GDP and weekly claims data at 8:30, Pending Home sales for Dec at 10, a small POMO at 11.
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