Dave Lutz, head of ETFs at JonesTrading, has an overview of markets this Friday:
- Banks continue their upward march after beating the Fed’s stress tests Wednesday. Most overseas markets are moving higher this morning. 10-year yields are flat waiting for spending data to come out. The dollar is coming off 9-month lows. Oil has its longest run of gains in three months.
Good Morning! US Futures are bouncing this AM, with Nasdaq up 50bp as Semis rally on MU, while Banks higher as Buffett converts his BAC warrants. Traders are keeping an eye on the Russell, which is trading flat this AM. Overseas, Markets are all higher, but EU Stoxx still tracking its worst week since November. DAX is up 40bp as a Rebound in Tech offsetting a slide in Chemicals / Healthcare as Bayer is smoked for 4% on headers. FTSE is up 25bp, with all sectors rallying led by a 1% pop in the Miners. Tech weakness was prominent throughout Asian trade – TOPIX and Hang Seng both lost 80bp – KOSPI lost 20bp as Sammy was hit while China stable after better PMI Prints. Eyes were down under, as Aussie smoked for 1.7% as Consumer was hit for 2% and Fins for 1%+.
The US 10YY is stable ahead of a key inflation read from the core PCE deflator at 8:30 – In Europe, the sell-off in sovereign bonds is abating on weaker Economic prints. Japan’s 10YY hits 3month highs, but selling abated with a weaker inflation read in Tokyo. Dollar rebounding from 9month lows, but 96 looms as heavy resistance in the DXY – Sterling remains near $1.30, down small on weaker UK GDP – Euro breaking downside $1.14 as EU Inflation posts light, where $/Y is battling to hold 112. Industrial commodities mostly higher as Ore up another 3.4%, bringing week’s gains to 14% as “Chinese Mills come off the Sidelines” – while Oil up 7th session in a row, longest streak in 3 months. Natty is off 1% and under $3 tho – while the “softs” continue to get huge inflows due to drought and offsides positioning.