Dave Lutz of JonesTrading has the top topics about which traders are talking about today:
Good Morning! US Futures are higher, but well off the best levels of the overnight. It’s encouraging that Russell is up 60bp, but that didn’t signal a strong session yesterday as the Oil and Gas sector was pummelled once again. While Ebola headlines have subsided (Passengers on that Emirates flight in Boston have been cleared), yesterday’s gappy action in Airlines show that headline risk looms large (shoot first, then ask questions). Low growth will remain in focus, as IEA slashes Oil demand estimates, and notes it will take sub $US80 to start knocking US shale producers offline — while Light inflation readings overnight from India, Japan, UK, France and Spain, coupled with a horrific ZEW survey from Germany have Euro Players on the back foot, with the DAX off 75bp in decent volume. The FTSE is outperforming, as a bid resurfaces in Tech shares, and the Miners are seeing a nice bounce. Over in Asia, Tokyo returns from a 3day weekend to lose 2.4% as the Yen jumps, while China lost small. Taiwan recovered 60bp from its 3% rout yesterday — but the standout winner is Aussie, gaining 1% as every industry group rallied, led by a 2.5% pop in the miners.
Government Bond yields are sharply under pressure this AM, as the US Credit market returns to their desks. The 30YY collapses below 3%, 10YY off 7bp and heading towards 2% as German paper trades near low yields — In Europe, there has been some focus on Greek Bonds getting hit as EU ministers’ debate bailout exit, but their paper is off the worst levels. The $US is making gains against the Euro, but has lost it’s pre-morning bid against the Yen — key to watch that cross today. Ruble hit again and Russian yields hit 5Y highs as Oil continues its downward trend – WTI nearing 2Y lows, Brent 4Y lows. Despite the stronger dollar, there is a bid in some Metals, with Silver and Copper firmly in the green, followed by Gold hitting 4week highs. Natty Gas continues to outperform in the energy complex, outperforming WTI by 4% and Gasoline by almost 6% in the last week
Focus on Earnings today, with C, JPM, WFC, INTC, and JNJ all posting numbers. The Banks outperformed yesterday into earnings, JPM were numbers released early – profit misses, revs beat, stock is off small. Watch Luxury Goods — Mulberry off 20% and Burberry 4% in London on weak #s. LVMH after the close today. With the rout in Semis since MCHP, heavy focus will me on LLTC (MCHP comp) and INTC tonight. Aside from earnings, we get NFIB Small Business Optimism at 7:30, a $US1B POMO at 11, and API data tonight for the Crude Complex ahead of inflation data tonight from China.
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