JonesTrading’s Dave Lutz has a roundup of what traders are chatting about right now:
Good Morning! US Futures are mixed, with Nasdaq and Russell in the green, while the S&P is off small. Overnight Macro headlines were relatively benign, save reports 3 Greek banks, 3 Italians, 2 Austrians, 1 Cypriot, 1 Portuguese and 1 Belgian set to fail stress tests (results Sunday) — That said, the EU Fins are holding a bid, with the SX7E in the green. The DAX is up 30bp, but volumes remain light on the content, with volumes down 25-50% to 5day averages (school holiday) — Financials seem to be the outperformers, while tobacco stocks are among the worst. Over in Asia, Russia’s MICEX is off almost 1% as Ruble pressure continues as no resolution in the gas crisis developing. Most other Asian markets took their cue from strong US tech earnings, as Nikkei climbed 2.5% (still GPIF tailwinds) – Aussie popped 1% on benign inflation data as Banks outperformed again, and Strong tech helped Hang Seng jump 1.4%. Save Korea, volumes across Asia were roughly 20% light as well.
The US 10YY is under pressure, dropping below 2.2% as it follows Bund yields south (Citi saying 10Y bunds going to 65bp) — US Treasuries have been losing their bid later into the afternoon after the Euro players head home — so look for rates to possibly pop into the afternoon. The DXY is higher, gaining ground against Sterling on dovish BoE comments, and Euro hit as EU’s Juncker pledges to unveil major investment plan this year. Despite the headwinds, commodities are generally higher, with Brent up 60bp and near session highs, Copper up 45bp — while the Grains and Beans are seeing continued covering.
Scheduled Catalysts today include MBA Mortgage Applications at 7:30, CPI at 8:30, Bank of Canada Rate Decision and Bank of Portugal’s Neves speaks at 10, we have DOE data for Crude at 10:30. There is NO POMO at 11, but sometime before the opening we should get the AIA’s Architecture Billings Index for September. While focus is on earnings, I’ll be watching Tech today — YHOO up 3.5%, while TSLA, AAPL, FB seem to be holding yesterday’s gains — while It will be important for Semis to build on yesterday’s 3% gain. Airline stocks are retreating 1% after yesterday’s surge, yet I saw no fresh Ebola headlines overnight, that’s still a risk for the bulls. Homebuilders have surged higher, gaining over 10% in the last week, but the ITHB hit a wall at the 200dma — look for some profit taking. Finally we have been seeing sharp covering in OIH, XOP and XLE this week — Let’s see how WTI acts into DOE today (3million barrel build expected) – now that contracts have rolled.