Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning before the opening bell.
Good Morning! US Futures are in rally mode, after early anxiety related headlines, where a “large police operation in northern Paris on Wednesday morning related to Friday’s mass shootings has resulted in a firefight with suspects” have been soothed by reports a major attack was just thwarted. The S&P is up 15bp, helped by Heavy M&A headlines in multiple sectors — (CP/NSC. ON/FCS and MON/ Syngenta).
Over in Europe, the DAX has staged a nice recovery from overnight lows, but remains 25bp in the red, led by Industrials and Material shares getting hit, but the EuroStoxx is getting hit for nearly 70bp as Materials and Telecom shares get hit for 2%+ in heavy volume.
Over in Asia, China lost 1% as concerns ramp over heavy IPOs later this week, and a doubling of Margin Costs next Monday — The Nikkei gained small in a muted session as traders await the BOJ decision tonight, and Aussie overcame sharp weakness from materials shares to close in the green on the back of a sharp Bank rally. It was risk off in most emerging markets tho, with India hit for 1.5%; Singapore and Thailand for 1%.
The US 10YY is unchanged this AM, and the DXY rallying from early weakness against the basket as the Euro remains near 7M lows and German Yields dropping towards October lows as slowdown concerns increase pressure on ECB to act in 2 weeks — There was Heavy focus on Germany’s 2Y auction going uncovered and yielding near a record low -38bp, showing the divergence between ECB and Fed Policies — Fed Funds remain steady at 66%, and 2YY slightly higher here into the release of Fed minutes later today.
The commodity complex is mixed, with metals once again under decent pressure, led by a 1% drop in platinum and copper remaining near 6Y lows despite headlines Chinese house prices stabilizing after declining for more than a year. The Energy complex is acting better, with Crude up nearly 2% after API last night showed a draw of 482,000 barrels, when the street was looking for builds as high as 2mil.
Ahead of us today, we have Fed’s Lockhart speaking at 8am, followed by the release of Housing Starts and Building Permits for October at 8:30. We get that DOE data for Crude at 10:30, then Fed’s Kaplan Discusses Economic Conditions at high noon. The main focus for Fed watchers will be at 2pm, when the Fed Releases Minutes from Oct. 27-28 FOMC Meeting.
Down in Washington, there are House, Senate hearings on international climate treaty early this AM, at 9am Treasury’s Lew gives opening remarks at Financial Literacy and Education Commission meeting at Treasury Dept — at 10am SEC Chair Mary Jo White testifies before House Financial Services Cmte hearing on SEC agenda, operations, FY17 budget request, and at 3pm the SEC holds an open meeting to consider whether to propose rule amendments related to certain alternative trading systems.
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