Via Dave Lutz at Jones Trading, here’s a super quick guide to what traders are talking about right now:
Good Morning, and welcome to Friday the 13th! The S&P trying to recover from its biggest % drop since September — the DJIA is now down five of its past seven sessions, while the S&P is down six of the past seven — and headwinds are blowing hard from the Retail Sector early, with FOSL off 18% and JWN off 20% in early trade — pushing the S&P futures off 20bp. Overseas, European Equities rest on 3week lows as Weaker Euroland GDP wasn’t enough to get the Doves stamping buy tickets. The DAX is off 70bp, rolling over from a near 200dma test, led by 1%+ drops in Tech, Fins, Industrials and Healthcare. The FTSE is dropping 1% despite Miners seeing a oversold bounce in London after the shellacking this week. Volumes across the continent are solid, with most exchanges trading heavier than recent trends. Over in Asia, Shanghai retraced the week’s gains by losing 1.6%, while Chinese energy heavyweights Cnooc and PetroChina got slammed, driving Hong Kong off 2%+. The Nikkei dipped 50bp as the Yen gathered some upward mojo, while Resource stocks weighed in Aussie, which lost 1.5% as BHP hit to 10Y+ lows.
The US 10YY is seeing heavy buying, as are Bunds which are driving German yields off 3bp. The song remains the same the last 48 hours in Fed Funds, with the market pricing in a 66% chance of a December lift — the slew of FOMC speakers did little to change those expectations. The$ has a bid against the basket, gaining against Euro as Angst builds on a collapsing German economic machine, and concerns ahead of a Portuguese rating call by DBRS later today which could push its paper outside of the buying scope of the ECB. With the stronger $US, we have headwinds for commodities, but many are bouncing from the whacking yesterday — Gold is up small, but Silver popping from very oversold conditions to add 50bp. No bounce in Copper tho, falling another 50bp — while the Oil complex adds 70bp despite IEA saying there was a record 3 billion barrels in storage tanks worldwide. Natty Gas is showing some life, adding 1.7% as the bounce from yesterday’s storage data continues.
At 8:30 we get US PPI and Advance Retail Sales for October, followed by the U. of Mich. Sentiment and Business Inventories at 10. Fed’s Mester Speaks on Economic Outlook and Monetary Policy at 12:30, just before the release of the Baker Hughes Rig Count at 1. 3:30 brings the CFTC’s “Commitment of Traders” data to round out the week. We should get a slew of 13Fs today as well — they are due to have been filed by Sunday the 15th. Down in Washington, the Senate and House are not in session – Energy Sec. Moniz delivers remarks on Paris climate talks at 2:30 today.
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