Dave Lutz of Jones Trading has the top topics about which traders are talking about today:
Good Morning! US Futures are mixed, and coming off the best levels of the overnight as IBM comes in light — Russell continues to lag, giving back some of last week’s outperformance — as the bears hope this is a “Red Flag” — It could also be the absence of small-cap buybacks into earnings (many big-caps don’t leave the market) — This is the Busiest week of earnings season, with results due from 128 S&P 500 companies, including six Dow components. Despite the ECB starting their Asset Purchase Plan Buying French Covered Debt, all Euro markets are under decent pressure. The DAX is worst off, losing 1.55%, but in very light volume. Earnings the main culprit, as SAP cut forecasts and Phillips missed #s. Lack of a Russia-Ukraine deal adds angst, but MICEX is off only small despite the Moody’s downgrade on Friday. Tech companies the weakest in Europe, losing 3% on average. It was a bullish session in Asia, the GPIF news had Japan up 4%, biggest rally in 16mos, while Taiwan jumps 1.7% as export orders this morning came in strong, and Samsung helped South Korea add 1.5%. Shanghai rose 70bp on China’s central bank’s plan to inject $US33 billion into the banking system.
The 10YY in the US is off small, while 5Y Breakevens are holding Friday’s rally. With demand still strong for German bunds, we are watching allocation flows from equities into Credit persisting, look for possible reversal around the EU Close. The DXY is off small, as the $US/Yen fails to hold 107, and the greenback loses ground to the Euro. Despite reports Saudi/Kuwait close a 500kbpd Oil field, Brent is off 70bp, while WTI seems to be holding near unchanged – The “Growth” trade will be in focus into China’s GDP print tonight, and Copper is getting hit for 1% while Moody’s is warning on mounting Ore production. Very quiet on the Catalyst Calendar today — with ECB’s Constancio Speaks on Banking Regulation at 7:50, Fed’s Powell speaks on community banking, and a decent sized POMO at 11. HAL, HAS, IBM, and VFC all are out pre-open while AAPL, CDNS, CMG, and TXN are after the close. Remain focused on the Travel Stocks – WHO Declares Nigeria Ebola-Free, and quarantines are lifted in Dallas for associates of the 1st Ebola death there