Dave Lutz of Stifel, Nicolaus passes along the top topics about which he’s talking about with clients today.
Good Morning — US Futures are up over 50bp this AM on the back of the DJIA biggest one day gain since July Yesterday — Strong Chinese Data combined with Increased signs US backing off Syrian attack, as diplomatic options materialise, and Obama realises he doesn’t have the Congressional votes propelling global equities.
EU Stocks are jumping to 1M highs, led by the DAX up 1.6% while EU Fins up 2% as PIIGS Yields retreat. The Asia Pacific Index has posted longest winning streak in 9mos, led by a 3.7% jump in India as the Rupee strengthens on their falling trade deficit. Nikkei gained 1.5%, and Shanghai posted a 1.1% gain — and EM contagion states like Thailand, Philippines, Indonesia and Malaysia were all well bid for. We have very good equity volume globally, with EU up 40% against 20day averages, Nikkei 50% above — DAX 60% above, while China’s volumes were a record overnight.
Right now, the US10YY is higher — Funding for the VZ debt offering, Syrian Fears subsiding, and a rotation into riskier Sovereign debt the likely causes. The A$ the standout FX, jumping toward 2M highs – Strong China data overnight propelling, but the DXY is higher as the greenback jumps against Euro and Yen — Causing a commodity headwind. While Copper is higher (China) — Gold and Silver getting hit (Syria, Better Eco Data), and the Crude Complex is under pressure (Seeing Baby Steps in Libya, with a refinery due to open tomorrow) Tech will be a focus today, as we get the AAPL refresh at 1pmET, and a TXN Mid-Q after the bell.
VZ will be marketing a record-breaking deal – Anticipation of what would be a record-breaking deal already is pushing bond prices down and yields up for Verizon and other companies in the telecommunications industry. Finally, keep an eye on Itlaian headlines — The postponed vote on Berlusconi has some optimism there — one that could quickly reverse ant put upside pressure on US yields…