Good morning and happy Election Day!
From Dave Lutz of JonesTrading, here’s a quick guide to what traders are talking about this morning:
Good Morning! US futures are retreating slightly, led by a 25bp drop in Russell names as the Yield Curve flattens, potentially a headwind for those Regional Fins, which are a large % of the IWM. The markets are being rather resilient near peaks, as the Oil complex got taken apart overnight — WTI and Brent are both off over 2.5% – Headlines Iran Nuke talks near a breakthrough, coupled with Saudi campaigning in Venezuela and Mexico for lower prices to slow Shale production are today’s “reasons”. EU Markets are acting well, with the DAX up 30bp, but volumes remain quite light on the continent into the ECB meeting — DAX trading 25% light to averages. Over in Asia, Nikkei popped nearly 3% in 2x volume as they re-open from yesterday’s holiday — China was flat, Aussie was slightly higher, while India was closed. The standout loser was Korea, as the KOSPI was hit as peeps worried plunging yen will hurt exports.
The US 10YY is under pressure, down 4bp as Germans flush toward Bunds as the ECB slashes growth forecasts — Bund Yields are near 2week lows, driving US 10YY toward 2.3% again. The $US is under pressure, losing ground as the Yen rebounds — and EUR regains 1.25 against the $US as €5.3bln in options expire at that strike today. Despite the commodity tailwinds, we find most everything in the red as the damage in the Crude Complex probably sparking margin liquidation in other commodities. Silver and Copper are off 90bp (Slow EU growth) — Corn, Soy and Wheat all off 1% (Higher Crop Yields). While both Brent and WTI are sharply lower, there remains a small bid in Natty Gas as shorts continue to cover there. While today is about the Micro, with a slew of earnings releases scheduled — Other Scheduled Catalysts today include US Trade Balance at 8:30, ISM New York at 9:45, and Factory Orders at 10. After the close we get API data for the Crude Complex, as well as results flowing in from 2014 Mid-Term elections. Some moves from earnings – BABA up 4%, – while HLF is off 15%, S 10% and PCLN 5%