Dave Lutz at JonesTrading has
Good Morning! US futures are mixed, with NDX up 20bp, but Russell firmly in the red, but well off overnight lows. We continue to hear drumbeats of slowing growth, with the OECD commenting indicators show weakening growth in Euroland, while Germany’s SAP is having it’s worst session in 3years on chatter of a weak pipeline. The DAX is off 40bp in decent volume, FTSE 35bp – Some sharp falls for the shares of travel and leisure companies pointing to fretting about the Ebola virus. Over in Asia, China services held up well, helping Shanghai pop 80bp to 19M highs on its reopening after “Golden Week”. Nikkei lost 1.2% as Kuroda’s comments yesterday continued to buoy the Yen, while Aussie continued to see pressure on falling commodity prices, with the ASX losing 80bp, led by the miners to the downside. Earnings season kicks off in the States, and Wall Street analysts have slashed expectations – Financials and energy stocks have led the downward revisions, while telecom services, materials and healthcare are expected to report the highest earnings growth for the quarter. The consumer discretionary sector is seen reporting a year-over-year decline in earnings.
The 10YY is up 1bp, a weak reversal after yesterday saw yields in the 30Y fall to 16month lows. Keep an eye on that “Policy Sensitive” 2YY, it rests at 1M lows as Fed Funds show the street pushing out the 1st rate hike over the last week. The DXY is up small, as the $US gains against Yen but Euro remains bid — a slight headwind for commodities. The Oil complex is the standout loser, with Brent and WTI off 1% (but off lows of 1.5%) as Euros and Asians continue to fret about Growth after the Weidmann comments yesterday. Gold is holding it’s bid over $US1200 — but it feels like the bulk of the energy flows are headed into Grains, with Wheat and Corn adding 6% over the last week. We get DOE data at 10:30, a 10Y reopening at 1 – but the day’s highlight will be the FOMC minutes at 2pm — After the close, preliminary Q3 PC numbers from Gartner and IDC hit, along with AA numbers.
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