Dave Lutz of Stifel Nicolaus has a round-up of what traders are chatting about before the opening bell:
Good Morning! US Futures are off small, and just off the lows of the overnight. EU Markets are under pressure, with Germany’s DAX off 50bp in decent volume as their GDP prints better. The EU fins are off small, as Spain’s yields are slightly wider this AM. Eyes remain on Emerging Markets — While we are seeing stability in Ukraine, Spillover to Russia continues, with the RTS off 1.5% on contagion concerns. Also, focus on Turkey — where more political corruption concerns have their market off over 2%, and CDS jumping. That said, the “Line in the Sand” is Brazil, and seeing no stress there into the Interest Rate Decision tomorrow night. In Asia, Shanghai fell another 2% – it’s off 5% in 3 sessions as tightening credit concerns mount. China’s yuan fell to a six-month low against the dollar, extending an abrupt wave of weakness since last week – Despite the stronger Yen, Nikkei popped 1.4%, but futures are marked off 50bp early this AM. The Miners are weak in Aussie on China demand concerns, and globally banks seem to be underperforming. Some single stock movers to highlight in the USA: TSLA +5% (MS PT hike to $US320), TOL + 2% and HD + 1.5% — while SCTY is off 2% (all on Earnings).
The 10YY in the US is off small, near the lows of the overnight and back under the 100dma. The Yen is stronger against the $US, causing some risk headwinds — driving the DXY lower and causing a tailwind for commodities. Industrial metals like Silver and Copper are under pressure (China Credit) — while Gold is off small, remaining near 4M highs as ETF inflows persist. The Energy complex is under pressure, as WTI loses 1% into API data tonight, while Brent is off small on Geopolitics (While Ukraine is not a major Oil producer, 1.5mln barrels of Russian oil pass through the Ukrainian ports on their way to Northwest Europe and the Mediterranean.). Nat Gas continues the downward trajectory after yesterday’s worst session in over 6 years, losing 2% early this AM. Catalysts ahead of us today include Case-Shiller at 9, Consumer Confidence and Richmond Fed at 10 — Fed’s Tarullo speaks at 10:10, while we have a decent size POMO operation at 11. At Noon, Brazil has a bond auction scheduled, just before the US sells $US32B in 2Y notes at 1. Tonight we get API data for Crude, ahead of DOE data tomorrow.