Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before markets open on Monday:
Good Morning! S&P futures initially opened off 1%, but have rallied back sharply of that 2000 level — Oversold conditions helping the bounce, as the SPX has declined for seven of the past eight trading days. The initial wave of selling was over in Europe — where the travel and leisure stocks came under significant pressure on the opening – Airlines, hotel groups and luxury brands were heaviest hit. The epicentre for selling was in France, with the CAC40 hit for 1.2% immediately, but heavy buying has propelled many of the discretionary stocks back into the green in Europe. Surprisingly enough, volumes are rather light — with most exchanges across the continent trading 20%+ light. In London, Glencore is holding a tentative bid, but the close of BHP in the red in Aussie must be exhausting the bulls. Over in Asia – Nikkei dropped 1% on headlines Japan was back in recession, led by a drop in Tech and Disc. Aussie lost 1% on Fins — while most emerging markets closed lower in risk-off fashion, but once again Volumes seemed light across Asia.
The horrific events overseas had initially driven a sharp bid towards safety, with the US 10YY trading as low as 2.23% in the overnight — that bid has been met by selling, and right now yields are tracking higher. As fed watchers wonder how these events may skew the Fed’s thinking, Fed Funds rest unchanged at 64% and the US2YY is tracking higher. With Smallcaps outperforming the S&P by 10bp this AM — It feels hawkish winds are blowing, so perhaps we see Fins outperform, but the Commodity complex needs to show a convincing bid ahead of Inflation numbers from the United States on Tuesday. Silver is up 1%, and Gold posts biggest jump in a month early, but has since seen most of those gains eroded. Copper is off 70bp — so the bid in the metals is unconvincing early. The Oil complex is up well over 1% however, as ISIS targets in middles east are bombed. This is all despite the Greenback showing a bid against most majors, with the Euro initially touching a 7M low under 1.07.
Ahead of us today, we get Empire Manufacturing at 8:30 — the ECB Publishes Weekly QE Details at 9:45 — at 11 ECB Executive Board Member Coeure Speaks in Paris. At 3:30, we get that delayed “Commitment of Traders” data. The REIT world will be in focus, not just due to MAR for HOT headlines, but also the Nareit Annual Convention in Las Vegas. We will also see a slew of Activist headlines, as the Robin Hood Investment Conference kicks off. There will be many headlines as the G-20 meets in Turkey, and the DOJ is to announce “major civil settlement” at 11:15.
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