Dave Lutz of JonesTrading passes along the top topics about which traders are talking today:
Euros noting how quiet it is despite the headlines as the globe digests the worst Air Tragedy since 9/11. Yesterday was the 8th largest VIX percentage gain. Bespoke notes On 22 days the VIX rose 30%+, yesterday’s 1.2% decline in S&P 500 was the mildest of them all. Average drop on days when VIX rises 30% is 3.6%. We have some Haven demand waning — Gold getting hit, Yen is softer, and US Yields are higher after closing at 52week lows.
The Micex is off another 1%, but Ruble is stabilizing as the UN Security Council schedules an emergency meeting at 10amET. Airline stocks recorded substantial losses in early European trade, but moves were less pronounced by midmorning -Other Sectors to keep an eye on include Potash stocks, Palladium, EU/Asia Natty Prices, Airlines, Oil players, and Wheat among others. Heavy Technical damage done yesterday — XBI (Biotech) under 200dma as it lost 14% in 2 weeks – IWM (Smallcaps) and IWO (Russell Growth) breaking downside 200dma. IWO is off 7% in 2 weeks. ITB (Homebuilders) off 7%, under 200dma a first in 2 months, and XRT (Retail) breaking the 200dma for a first in 6 weeks.
Credit focus is in Junk, where the HYG (HY) breaks the 200dma for a first since February. US Futures just poked positive, with NDX and SPX up 20bp early on earnings — The DAX is off 60bp, but recovering from session lows quickly as US traders brace for Options Expiry today. Volumes are heavy in Europe, with Germany trading double it’s 20day averages right now. Over in Asia, the Nikkei lost 1% in very light trade, China had a small pop on declining property prices — Aussie gained small as Miners advanced on metal prices overnight, while Malaysia’s market lost 50bp (Malaysia Air still above May Lows). Keep an eye on Treasuries, as some of the PIIGS debt is weaker and EU Fins are getting slammed with the SX7E dancing on July Lows. The DXY is showing some life, gaining against both Yen and Euro, providing a headwind for commodities — Oil remains bid, but both WTI and Brent are nearing session lows — Gold has reversed lower, while Copper continues to see profit-taking, losing 70bp. Scheduled Catalysts today include: Canadian CPI at 8:30, Michigan Confidence at 9:55, Leading Index at 10, along with Regional and State Employment and Unemployment for June. There is NO POMO at 11.
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