Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning.
Good Morning! US Futures are under pressure, led by a 1% drop in Russell, and 70bp fall in S&P. Weakening began right when Chinese markets opened sharply lower. Despite this backdrop, Greek optimism has Europe in Rally Mode — with the DAX up 90bp on mean reversion (Still off 4% over the last week, compared to S&Ps 1% gain). Volumes are heavier today than all week, led by heavy buying in Financials, Industrials and Technology shares. All eyes remain on China, however, as Shanghai Composite closed down 5.9% after falling as much as 8% at the open. The Shenzhen index lost 2%, while the start-up ChiNext board managed to inch up small (has been decimated). The renewed selling followed another round of share suspensions overnight that have now halted trading in 1,476 stocks — or more than 50 per cent of all listed companies on China’s two main exchanges. Japan’s Nikkei was down 3 per cent and Australia’s S&P/ASX 200 lost 2 per cent with banks and Miners leading the fall, but HK down 6% stole the show. Investors sold what they could rather than what they want with so many suspensions in China. Our Hawaii Desk notes that Volumes were strong as there was a bit more urgency in today’s selloff
The US 10YY is under pressure again, and nearing a 200dma test at 2.15%. This is despite selling in German Bunds and a bid in all the PIIGS debt as chatter circulates the ECB has accelerated QE purchases ahead of Sunday’s summit of all 28 EU nations on Greece. The $US is under pressure, but bouncing quickly from yesterday’s lows — but eyes on the commodity complex were on China. Metals including copper, nickel, Ore, Steel Rebar and silver in Shanghai fell to their daily down limits. Iron Ore is now below $US50, down 11% in a week. The Crude Complex has a tentative bounce to it despite a bearish API report ahead of DOE today — all while the Friday Iran Deadline awaits. Scheduled Catalysts today include the DOE data for Crude at 10:30, a 10-Year Notes auction at 1pm, ahead of Minutes from June 16-17 FOMC Meeting and Fed’s Williams speech at 2pm. IMF Managing Director Christine Lagarde speaks at 3pm, right when US Consumer Confidence hits. AA Kicks off the Earnings Season tonight after the close.