Dave Lutz of Stifel Nicolaus passes along what he’s chattering about this morning.
Good Morning! US Futures are higher, but struggling to stay upside of 1850 early. EU Markets are all in the red, led by a 30bp drop in Germany on heavier than average volume. FT notes “given that the S&P in the last two sessions has failed to hold initial gains above 1,850, it seems that European equity traders are a bit reluctant to adopt an overly bullish stance.” There is some stability in EM, with Ukraine’s CDS continuing to come off, despite their hryvnia having another record low against $US — but watch South Africa as they slash GDP forecasts, causing their debt to get hit. Brazil should remain on your screens into their interest rate announcement tonight after the US close. In Asia, the Nikksi lost 50bp, but Japan’s TOPIX closes above 50dma, a first in a month. China managed a bounce, despite Bloomberg headlines saying Credit Stress metrics are triggering alarm bells. Aussie was flat, but globally Materials stocks remain under pressure, with Aussie Miners off almost 1.5%. Banks remain in firmly in the red as well — still reeling from a top republican’s tax assult on them, and the BDC sector getting booted from S&P indicies. The Street likes LOW’s numbers, bidding the stock up 5%. ARO is adding 5% as the company puts itself up for sale — and TSLA is adding another 3%. On the downside, watch the Solars, as FSLR is off 14% on earnings.
The 10YY is slightly higher, but remains entrenched under the 100dma. The Yen has been breaking down against the $US overnight, boosting the DXY and causing a slight headwind for commodities. Metals are mixed, with industrial metals up small as copper bounces off a 3week low, but Gold is coming off 30bp from 4M highs despite headlines Gold ETFs could see their first full month of net inflows in over a year. Natty is off another 5% into expiration – Natural Gas Poised for Biggest Three-Day Loss Since 2007 — the March Contract rolls to April Today. The Oil complex is up small into DOE data today — constant focus on the Cushing Inventory draw on pipeline fills. Stay attuned to the oil-by-rail trade, as headline hit late session yesterday about emergency rules requiring extensive tests on crude oil moving by rail, and a U.S. House subcommittee is expected to meet on Wednesday to discuss passenger and freight rail safety. Scheduled Catalysts today include New Home Sales for January and the Q4 FDIC bank earnings report at 10, DOE Data for Crude at 10:30, the week’s smallest POMO at 11, Fed’s Rosengren Speaks at Noon, an Auction of $US13B in 2Y Floaters, and $US35B in 5Y Notes at 1pm. Tonight after the bell, we get Short Interest data, a Brazil Rate Announcement, and Fed’s Pianalto Speaks on his career.