Dave Lutz of Stifel, Nicolaus has the topics that traders are talking about today:
Good Morning! US Futures are starting 50bp higher, jumping to peaks on M&A headlines ($7B Food Deal on the tape) and electing stops in some global indices. The Momentum names are rebounding early, with TWTR, P, FEYE and PLUG all up over 2% early. Overseas, markets are jumping, with the DAX up 1% in decent volumes. Markets are shrugging off votes in Ukraine’s Separatist Union — Russia’s Micex off very small after gaining almost 5% last week. In Asia, Shanghai jumped 2% as Beijing reiterated it would go ahead with a swath of reforms that will liberalize financial markets, but the Nikkei lost 40bp as Japan’s 3 biggest banks report this week. Aussie was off 40bp, led by weak mining stocks as Ore falls to a 20month low — but Emerging Markets hitting 1M highs, with India’s Sensex hits new all-time highs into Election results.
The 10YY is up 1bp to May highs this AM — and the 2/10 Yield curve continues to steepen, a welcome tailwind for the financials. The DXY is off small, the Yen is slightly weaker, but the € is taking some flows. The commodity markets are jumping, however — with Copper and Silver jumping 1.5%+ on China Stimulus hopes – Nickel jumping over 2% as Indonesia ban continues to cause upward pressure. Gold is popping 50bp, but being rejected early from the 200dma and $US1300/oz. The Crude Complex is slightly higher as the market jockeys between Ukraine and Iran headlines — For Catalysts, We have a light calendar today — There is a large POMO at 11, Fed’s Plosser (Hawk) speaks at 12, and we get the Monthly Budget Statement at 2. Focus tonight will be on China’s IP and Retail Sales release.
Watch the Retailers into tomorrow’s Advance Retail Sales for April. Traders continue to watch the Homebuilders (ITB) dancing on the 200dma into this week’s Housing Starts and Building Permits for April releases. Credit market’s focus is on multiple Fed speakers — including Yellen on Thursday. Finally — 3 commodities are in focus: Global Inflation prints will have Gold bugs hoping it gets back over $US1300/oz, Oil traders will be watching developments in Iran’s talks, and Metals traders will be watching the potential for a strike at Aussie’s Port Hedlund — it’s largest Ore exporting facility.
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