Dave Lutz of JonesTrading has the top topics about which traders are talking about today:
Good Morning! US Futures are starting in the red, with Russell underperforming again — as Global Growth concerns were not abated last night, with German economic confidence in current conditions plunging in as worries about Russian sanctions mounted (Rouble to new lows as the cease-fire comes under pressure overnight) — and Doves retreated in China after news that foreign direct investment fell sharply last month. Alibaba lifts range to $US66-$68, up from $US60-$66, and today should wrap the bulk of the “fundraising” for the IPO. Overseas, the FTSE is losing 80bp in good volume, and Sterling is lower as polls continue to illustrate the Scottish vote is on a knife-edge. The DAX is off 40bp, while we are seeing decent volume in the EU periphery markets as PIIGS yields are rising — and French Equities are not stressed about France’s socialist government facing its second confidence vote in less than six months around 1pmET. Japan was under pressure after their 3day weekend as Banks retreated We cannot discount the impact of China’s shoddy data over the weekend causing the “Global Growth” retreat yesterday, and that may continue today — with the Shanghai Composite losing 1.8% in 1.5x normal volume — Industrials, Tech, Energy were all hit for ~4% in Shenzhen. That, coupled with RBA minutes hit the A$ to 6M lows overnight.
The Oil complex is back under pressure (key upside leadership group y’day), with Brent only momentarily bouncing from the roll-over of the October contract ahead of WTI storage data the next 24 hours. Part of the Selloff must be blamed on Fed Concerns, as many key groups (Biotech, Internet, Smallcaps) had recovered towards pre “Yelloff” heights when Janet called out overvaluation. Tightening fears (along with China) have been weighing on Emerging Markets — The FTSE Emerging equity index is on course for its longest run of losses in more than 10 years. Keep an eye on that “Policy Sensitive” 2YY, it’s been getting gappy to the upside lately, adding nearly 20bp in 4 weeks. Commodity players also remain focused on the crowded short in Grains and Beans — Corn and Wheat had big upside reversal days yesterday, and are jumping 1%+ again this AM. Scheduled catalysts today include PPI at 8:30, Fed’s Hunter Speaks on Community Banking at 10, we have the week’s largest POMO at 11. Today is expiry of the current VIX contract as well.