Dave Lutz of Stifel, Nicolaus has the top topics that traders are talking about today:
US Futures are basically unchanged into the 8:30 report, mirroring quiet sessions in Europe with most markets trading light to 20day averages. We do have some tensions building in Ukraine as the Government tries to retake occupied buildings — While Ukrainian and Russian Bonds are under pressure, Russia’s Micex is only off 30bp. Over in Asia — Shanghai remained closed for Holiday, while Japan lost small in light trading. Down in Aussie, the Biggest Banks keep rising, and the Biggest Miners keep falling. There was some “Good Harbor” asset allocation at work in the US market yesterday – IWM, UWM, UST, IEI, IEF, IWR, SSO were all trading heavier volumes on that light liquidity May Day. We also saw “New Tech” outperforming “Old Tech” by almost 4% yesterday, but LNKD, EXPE, OPEN are all under pressure early today — while we are seeing ORCL and CSCO bid up almost 1% each. Some key earnings today include CVX, MMC, KCG, OZM and CVS before the open, while we should hear from BRK.A after the close.
The 10YY is up small, bouncing from multi-month lows from yesterday – Low Liquidity, No Inflation, Fed getting more Dovish, Japanese and Chinese Buying, Window Dressing, but mostly poor positioning are all reasons for the Treasury Bid this week. The DXY is in rally mode, as the Yen is getting hit this morning, and the $US/¥ is nearing 3week highs. Despite this headwind for commodities — we are seeing Lumber jumping 1%, and Copper continuing to rebound from near multi-year lows. Gold and Silver are showing some bounce, but may be of the “dead cat” variety for now as ETF liquidations weigh. The Energy complex is underpinned by the Ukraine Tension, but WTI was rejected from the $US100 level and 200dma early this AM. Clearly the main catalyst today is the US Employment report at 8:30 — but we also get Brazil PMI at 9, ISM New York at 9:45, and Factory Orders at 10. There is NO POMO operation from the NY Fed today.
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