Dave Lutz of Stifel Nicolaus has a roundup of what traders are chatting about ahead of the U.S. market open:
Good Morning! US futures are off small, as many contemplate the technical sell signals received yesterday — Some would point the blame at the Fed Minutes, which were more hawkish than prior (Hilsenrath “Interest-Rate Increase on Radar”), despite their focus on the collapse of Inflation — While the DXY jumped, the Fed fund Futures showed no shift from assuming the first rate increase isn’t until Sept2015. I was watching headwinds from Chicago into Expiry, as the VIX spiked 12% – and the EEM breaking down, as the situation deteriorated in the Ukraine — The EEM is marked off another 70bp this AM as Ukraine’s CDS is bid higher as Russia delayed a $US2B bailout tranche yesterday due to “technical reasons”. Markets are weaker over in Europe, as France’s light PMI weighs on € and markets. Germany’s DAX is off over 1% in decent volume — the worst performing EU market. In Asia, The Stronger Yen hit Nikkei for 2.2% – and futures are not rebounding this AM – China’s PMI printed weak again, but strength in their Oil complex (Sinopec News) held the Composite near unchanged – Interesting Aussie was unchanged despite the PBoC withdrawing more liquidity overnight. Single Stock movers include TSLA up 10%+ (earnings) — and the moves from the FB deal: MEET +16%, BBRY up 6%, TWTR + 2%. FB is off 3% – would have been off more if GOOG had bought “WhatsApp” many think.
The 10YY is lower in the States, but rebounded from the 2.7% level sharply overnight. Eyes on the flattening yield curve, as globally, Banks are getting hit again – Eyes will be on the US Fins today as they have been big underperformers, with some majors hitting 2+ month lows as Citi shorted 15mln shares of the XLF yesterday for one client. Despite it’s losses against the popping Yen, the DXY is higher this AM on the € weakness — causing a headwind for commodities. Metals are under pressure, with Silver and Copper lower on China’s weak PMI — while Gold is retracing for a 200dma test. The Oil complex is mixed, as sharp Cushing outflows in API data are steepening the WTI curve into Expiration and DOE data today. Brent is slightly weaker, as Iran has agreed to a timetable and framework for continued discussions, and headlines slow from unrest in Syria and South Sudan. Nat Gas is off 2% as the CME spiked Nat Gas Margins overnight. Scheduled catalysts today include CPI and Weekly Jobless Claims at 8:30, Preliminary PMI at 9, Philly Fed and EU Consumer Confidence at 10, Natty Storage data at 10:30, Crude Storage data at 11, along with a decent size POMO operation — at 12 watch the Brazil Auction, and the US Treasury is selling $US9B in TIPs at 1.
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