Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about before markets open on Tuesday as stocks in the US look set to open lower for a second straight day.
Good Morning, and welcome to “Turnaround Tuesday?” US Futures are starting in the red for now, off 60bp but well above yesterday’s lowest levels as traders twitch around buy tickets. All eyes were on China overnight, where stocks fell more than 2% in early trade, prompting fears that exchanges were set for a second day of panic selling — and sparking action from the PBOC — The People’s Bank of China injected nearly $20bn into money markets – its largest amount since September, while a six-month selling ban for major institutions was also extended. European markets have continued their selling, with the DAX off 50bp led by a sharp drop in Consumer Discretionary shares. London is outperforming tho – with the FTSE near unchanged as retailers shrug off weak sales and the Miners stage a sharp snapback as commodities continue to rally. Over in Asia, Shanghai closed off small, while Shenzen was hit for almost 2%. Nikkei closed down small, and Aussie played catch-up with Monday’s selloff — losing 1.6%, led by a sharp selloff in the banks. That said, many smaller Asian exchanges closed higher, led by a 60bp+ pop in Korea, Malaysia and Indonesia
Haven flows continue pressing US and German Yields lower, with the 10Y Treasury off 2bp and dancing along the 2.22% level. The Greenback is in full rally mode tho, as Euro drops as European and German Inflation prints come in light the last 24 hours. Keep an eye on that Yen tho, it continues to get upward momentum despite BoJ’s Kuroda chatting Bolder Steps to Meet Price Targets. Interesting action going on in the commodity complex, as some houses point to China trade data showing an acceleration of metals imports. Iron Ore is on a 11day winning streak, and this AM we see Copper and Silver adding 1%+/ Even the gold bugs are happy, with the precious metal adding another 40bp and getting upside of the 50dma — a first since November. Keep an eye on the Oil Complex tho, as pipeline outages coupled with Mississippi floods are pressing the WTI contracts lower by 1%, and nearing a test of yesterday’s floor into API inventory data later tonight.
Ahead of us today, we get Light Vehicle Sales Data for Autos, along with ACT preliminary truck orders. Keep an eye on the Airlines, as DAL updates it’s numbers — and we should get a flurry of headlines from Las Vegas where the Consumer Electronics Show kicks off. At 9:45 we get the ISM New York — while at 12:30 API President Jack Gerard gives annual “State of American Energy” speech, ahead of Inventory data at 4:30ET. Down in Washington, at 11:40 President Obama delivers remarks on actions he’s taking to reduce gun violence thru executive actions.