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 slightly higher, with the E-Minis dancing near 1840 on this Expiry Friday as Sentiment improves over reports of a Ukraine deal — EU Markets are mixed in light trade, with the DAX adding small in volumes 35% below 20day averages. EU Fins remain under pressure, as do Fins globally — they have been serial underperformers in February. In Asia, the Yen’s drop brought another 3% Nikkei surge, Japan’s Topix posted the biggest weekly rally since November — Nikkei futures are holding those gains still. Shanghai lost 1.2% on profittaking in some of the Oils that surged yesterday — while Miners jumped in Aussie, dragging the ASX to it’s highest close in 6 years. Looking at EM, Ukraine’s FX is jumping higher, and CDS dropping — as reports of a deal outweigh the S&P downgrade overnight. Stay focused on Brazil, who’s equity market is one of the worst performers this week — as Brazil is the “last Line” in the sand between EM angst bleeding into Developed markets. We are keeping an eye on the consumer names — and many are seeing a nice pre-opening pop: WEN is up 5%, JCP 4%, and YELP, LULU and PCLN all adding 2%+. The Loser of the overnight is GRPN, which is off 27% from last night’s earnings induced spike to $US12.
The 10YY is flat, after being rejected from 2.76% several times in the last 24 hours — but remains above the 100dma. The DXY is stronger, making gains against both € and Yen — causing a headwind for commodities. While Gasoline, Brent and WTI are all in the red — the Moonshot in Natty continues, with the commodity adding almost 3% overnight, bringing the week’s gains near 50%. Coffee, however, continues to rally, adding 2% – and is now up almost 55% over the last 5 sessions as concerns mount on crops. Gold is popping, and nearing week highs, after it neared a test of the 200dma after yesterday’s TIPs auction, which the sale of $US9B in Inflation Protected securities drew the lowest demand in over 12 years. We are getting G20 headlines ahead of the meet in Aussie this weekend — With heavy focus on EM repairing their balance sheets to weather the global tapering — and a large emphasis on encouraging global growth. Scheduled Catalysts today include Existing Home Sales for January at 10, a Small POMO at 11 – Fed’s Bullard Speaks on Economy in St. Louis at 1:10 — and we have Expiration on the opening and close. At some point, we will get some EU ratings headlines – Fitch on Ireland, Moody’s on Spain.