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 starting on a weaker footing this AM, with the E-Minis retreating 30bp. A lot of reasons for the softness, from Zero Hedge relaying GS’s Kostin that the market is overvalued — to concerns about retail (4 retailers have cut forecasts so far this AM –> ASNA, LULU, SSI and EXPR. This comes as ICR starts today and ahead of Advance Retail Sales tomorrow) — to Earnings angst (30 of the 500 SPX companies report – Major Fins like JPM, BAC, AXP and GS — as well as INTC and GE). Europe remains on strong footing, however — with DAX + 20bp in trading 30% heavier than normal. EU banks are up another 1%, led by a pop in the Spanish fins on a FT read highlighting cheap funding — Spain’s market is up another 50bp, and best performer in Europe YTD (EWP). In Asia, Shanghai hit to a 5month low as several IPOs were pulled by their regulator — While Japan was closed for Holiday, Nikkei futures are off 1.6% as the Yen is near 3week highs to the Dollar. India is at 52 week highs as the Rupee recovers, and EM ripped higher on the US Yield collapse — Indonesia + 3%, Thailand + 2%. Single Stock movers in the USA include TWTR +3.5% (GS bumps PT), WEN +5% (Earnings), LULU -7% (guidance), ICPT is off 30% (gravity). Sectors to focus on include Retailers with ICR kicking off, Autos with the Detroit show, HC with the JPM conference, and Financials with Basel headlines and earnings.
Yields in the US remain on 3 week lows, with the 10YY at 2.85%. The DXY is basically flat caught between a strong yen, and weaker €. — 2 major skews in commodities, with Base Metals like Nickel jumping after a controversial Indonesian government ruling banning miners from exporting unprocessed minerals — and the Oil complex is under pressure on the Iran accord reducing geopolitical risk premiums. Gold is off small, but remains above the 50dma at 1242, and covering continues in the Agriculture complex on the WASDE data from Friday. We have a light economic calendar today, with the Employment Trends Index at 10, a small POMO at 11, Fed’s Lockhart to Speak on Economic Outlook at 12:40, and the Treasury’s Monthly Budget Statement at 2.
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