Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about on Monday morning:
Good Morning! US Futures are holding just below 2month highs, as investors digest 11 up days in the last 14 sessions. EU Cash open brought a huge spike in futures in the early go, and have most Euro markets just off highs. The DAX is up 77bp, but volumes look terrible – Foods outperforming in Europe, led by Danone and Metro AG’s #s. Financials continue to run, with Banks in Germany up 1%+, and the bid persists in that tech sector. While headline GDP beat expectations, traders focused on China’s weakest growth rate in almost 6 years — Miners were hit in London, with Anglo down as much as 4% and has the FTSE lagging sharply. Most action in Asia was muted, Nikkei lost almost 1% with only “defensive” sectors of healthcare, food and beverage making gains – Aussie gained 20bp as doves continue their bidding, and EM was steady, buoyed by further flows into Indonesia.
The US 10YY has been probing that 2.05% area all overnight — and stops above could spark flows towards equities quickly. Biotech may continue last week’s bounce as VRX is bid up after posting results, so the cover bid will be there in HY. The DXY is stronger against the basket, making nice gains against Euro as ECB gears up for Thursday’s meet — but Aussie’s bid continues and the Yen is rallying from lows. Watch that Canadian $US, they have a wild election on their hands. Gold seeing profit-taking, dropping 85bp and back under the 200dma as the $US headwinds intensify. The Oil complex is under pressure, and 2 stories caught my eye — One of Iran “Vowing” to reclaim share quickly, and the other of Saudi Inventories popping because their exports are dropping.
It’s a quiet Monday with few catalyst scheduled — but we do have Fed’s Brainard Speaking at 10, followed by Fed’s Lacker speaking on Education in Richmond at 12. Homebuilders were a huge underperformer last week — so watch that NAHB Housing Market Index data at 10. After the close, “Big Blue” posts numbers. Down in Washington, the Senate, House back in session after week-long recess — At 8:30, the energy patch will be focused on a EPA teleconference on impact of fracking on drinking water – at 9:30 the Supreme Court will issue a list of orders, including new cases it will take up — and Obama meets with business CEOs ahead of Paris global climate summit at 11:50