Dave Lutz of Stifel, Nicolaus passes along the top topics that traders are talking about today:
Good Morning! Equity futures are rebounding, with the E-Minis up 30bp after the longest year-starting slump seen in 9 years — For Historians, WSJ notes this is only the seventh time the index has started the year with a three-day losing streak since it was established in 1928 — but in six of those seven years, it subsequently posted an annual gain. Nasdaq Futures are outperforming this first day of CES, as AAPL catches a bid over the 50dma as investors rotate away from Samsung’s poor earnings. We have a upbeat tone in Europe as well ahead of the ECB decision Thursday, as the DAX is adding 60bp in heavier volume — but Spain continues the upward leader, as short-covering propels the IBEX up almost 2% in very heavy trade. Asia was mostly red, as the Nikkei lost another 60bp on a stronger Yen, and China remained near 5M lows on multiple headwinds (IPO resumption, Shadow Banking Regulations). Hong Kong was supported by Li & Fung surging 11%, and South Korea managed a gain despite Samsung — as many feel their Central Bank will cut rates to depress their FX later this week. Airlines and Rails will remain in focus on the weather — while single stock overnight movers include a continued rally in SIRI, MGM up 2% (MS Upgrade), a Continued bid under US Fins with BAC adding 1%, MSFT up 1% (China Gaming Console Ban removed), and DDD rebounding 3% on their CES lineup rollout. Losers include NFLX off 3% on MS downgrade, GRPN off 1.5% on Livingsocial Stake Sale — and LNKD off 2% on a BofA downgrade.
Yields in the US are flat, remaining near 2 week lows, as Yellen is confirmed by a 56-26 vote. There remains a strong bid in PIIGS debt, propelling the EU fins up 3% today (Basel Watering Down tailwind as well). The DXY is basically flat, but we have a decent pop in the Crude Complex, as Syria spills over into Iraq, and trouble remains at the Libyan ports. Gold remains in the green, but failed upside 50dma again overnight. With the weather, focus remains on the Agriculture Complex as well, with Cattle, Orange Juice and Wheat all supported on supply concerns. We have Rosengren speaking at 8:30, a decent size POMO at 11, a 3Y auction at 1pm, Williams speaking at 2:10, then API data on the Energy Complex tonight at 4:30.