JonesTrading’s Dave Lutz has a roundup of what traders are buzzing about after the long weekend.
Good Morning! Despite Geopolitical unrest (Ukraine, Pakistan, Gaza, ISIS, Iraq) S&P Futures are resting at fresh all-time highs, up 20bp this AM — but watch Smallcaps, Russell Minis are jumping nearly 50bp early — we will be On the lookout for a “Good Harbor” ETF rebalance today — Late August they moved to an overall allocation of 25% large cap equities and 75% treasuries — so sounds like they will chase smallcaps this month. The DAX is climbing 80bp, but volumes are not awakening to the end of summer quite yet, with most EU markets trading 15% light to last week’s meager tally Over in Asia, Nikkei jumped to a 7M high after wages in July rose faster than expected; China jumped 1.3% as IPO selling subsides; India continues its surge (up 27% ytd). Miners are jumping as Aussie dumps its mining Tax; and watch Casino Names as Macau casino revenue was worse than analysts estimated in August, falling a third straight month as China’s anti-graft campaign curbed gambling by VIPs.
We have selling of Global Sovs, with U.S. and German 10YY up 4bp, but German 2’s remain negative, while French 2’s went negative yesterday. We have the Dollar jumping, nearing 6Y highs against the Yen, as Sterling is under some pressure as polls show Scottish Independence gaining rapid momentum and Euro nears 1Y lows and nears the “Floor” against the Swiss Franc. We have Oil weaker on multiple headwinds (Global Manufacturing light, the threat of more Russian Sanctions materialise, and OPEC is increasing production) — Gold hits 1month lows as Metal investors’ chase Palladium to a 13Y high and Weak Manufacturing data from EU has doves chirping into ECB this week. Very quiet on the catalyst calendar today – — Manufacturing PMI at 8:30 — there is NO POMO. We get busy the rest of the week with decisions from ECB, BOJ, BOE and Canada / US Employment Report / Federal Reserve Beige Book / Chain Store Sales Trends for August.