Dave Lutz of Stifel Nicolaus has a roundup of what traders are chatting about ahead of the U.S. market open:
Good Morning, and Happy Valentine’s day — US Futures are higher, SPX contracts adding 20bp and not 1% off all-time highs — the S&P is up 5% in 8 days. Bear in mind liquidity will remain light in the US, as the Northeast digs out of tough weather, all with a 3 day weekend looming large. Good day over in Europe, led by Italy — who’s news of yet another government is being met by Investor cheer (will accelerate reforms) — Their equity market is up 2% as Bond Yields drop quick (At some point after the EU close, Moody’s will comment on Italy). The DAX has added 80bp, in slightly better than average volume. EU fin move remains benign given the backdrop, adding only 75bp — telling me that the US –> EU trade is reversing quick. In Asia, eyes were on the Nikkei, which lost 1.5% and broke under the 200dma again as the Yen is strengthening on no news – China added 80bp on the back of stable inflation data, and miner optimism continues in Aussie, dragging the ASX up 1%. EM Markets are stable, with the EM basket of FX gaining against the greenback, and CDS coming off for Hungary, Turkey, Ukraine and South Africa.
The US 10YY is basically flat, but the DXY is weaker, losing ground to Yen and Euro — as the EU shows better than forecast growth. This is a natural tailwind for commodities, and we have Gold breaking higher, gaining 1.3% as it gets legs over $US1300 — but Silver is “white hot” — gaining 3% and approaching the 200dma, a first in a year. Copper’s move remains benign, while Lumber is gaining 1%. Nat gas continues it’s upward trajectory — gaining 2% on the back of a 25% move over the last week. The Oil complex is under some pressure, with WTI breaking downside $US100 yet again. We get PPI revisions at 8:30 in the US, IP and Capacity Utilization at 9:15, University of Michigan Survey at 9:55 — a small POMO at 11, all ahead of a bid Japan data dump later tonight. You could also get some whippy single stock movers, as 13Fs are due from the Funds today.