Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about this morning.
Good Morning, and Happy Friday! US Futures are in rally mode, up on the back of Upside reports from AMZN, SBUX, V, JNPR among others. European markets are mostly higher, led by a 60bp pop in Italy and 30bp outta Paris. Germany’s DAX is flat, as German factory data disappointed. Most underlying sectors are in the green — but that Materials sector is just getting crushed overseas in heavy trade. Volumes in Frankfurt not encouraging, with most issues 20% light overall. Over in Asia, weak Chinese factory activity and falling commodity prices had every major exchange hit for 50bp+. Shanghai’s composite lost 1.2% in heavy volume, despite further reports of indirect PBOC buying of equities. Nikkei lost 70bp on growth concerns, while the Sydney stock market dipped 40bp as the Miners were hit for over 4% down under.
The US 10YY is unchanged despite there being a solid bid for Bunds overseas — but watch the 2.265% yields in the States, was tested and held 3x in the last 12 hours. The DXY has recovered all of yesterday’s weakness as Asian FX getting hit against the Greenback — Aussie$, Korean Won, Indonesian rupiah and Malaysian ringgit all on multi-year lows — Massive Growth Slowdown in Asia getting priced into FX and Commodities fast in July. Watch 97.50 in the DXY, has failed getting upside multiple times this AM — but with the stronger dollar — the commodity headwinds continue to grow. The Crude Oil complex is drifting around yesterday’s lows, while every soft seems to be under pressure. The focus is on the metal complex, where we find Silver off 2%, and Gold just behind — that yeller metal just took out Monday’s Gap Low in Shanghai. Like many Asian trades, Copper finds itself weaker, and hitting 6Y lows today. Keep an eye on FCX — Freeport acted like death yesterday
Relatively quiet on the economic front today, as the street’s attention is firmly on next week’s FOMC meet. At 9:45 we get the Markit US Manufacturing PMI data — while at 10 Home Builder bulls hope the New Home Sales data keeps the cover in the group. At 1pm we get the Baker Hughes Rig Count, followed by the “Commitment of Traders” data at 3:30.
On the Government front — Talks on 12-nation TPP open in Maui, Hawaii, in effort to reach final agreement on pact; Senate holds roll call vote on motion to proceed on highway package, and Council of Economic Advisers Chairman Jason Furman speaks at Third Way event on monthly jobs report. Pretty quiet day away from the earnings…