- Thomson Reuters
Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- US markets are shrugging off President Trump’s “Fire and Fury” tweet aimed at North Korea. Asia markets are reacting, though. Japan and South Korea both lost ground. Gold is rising after the news, it’s up about 1%.
Good Morning! “Fire and Fury” is getting reaction, but not panic. Dow Futures off 20bp, while Nasdaq and Russell fall 50bp+. The headlines between Pyongyang and Washington caused the most stress in Japan and South Korea with both markets off over 1%. Samsung’s 3% loss weighed heavy in Korea, while that smallcap “mothers” index in Tokyo lost 2.5%. South Korea Won is off 1%. Some Havens on the move – $/Y falling below 110, Gold headed for biggest gain in a few weeks, US10YY dipping 2bp, and
VIX futures adding 5%. Aside from the Swissie Franc having biggest upside move in over 2 years – most of the moves are very muted. $/Y will be the key cross to watch, and they remain just below the week’s lows.
There is a decent pullback in European trading though, with the DAX down 1.3% – it’s worst showing in 3 weeks – while the FTSE is off 70bp as Banks weigh in London, but the Sterling drop is mitigating losses. Volumes are heavy, with most exchanges trading 150% normal volume, but it feels very driven with ETFs and Futures – as single stock trading seems quite muted. Away from japan and Korea, it was quiet elsewhere in Asia. Hang Seng lost 30bp – Shanghai down 20bp – Aussie climbed 40bp as the Big Banks started reporting. Keep your eye on the Sensex – it lost 70bp, dropping 700 points in 5 days(2.5%). Rhetoric is ramping between India and China.
Aside from the moves in the Swissie and Won – Most other currencies are quiet. The DXY is off small – Sterling is trying to retake $1.3 after this week’s smackdown – The Loonie drifting near 3y lows, and the Rand still getting hit after the Zuma vote yesterday. Gold and Silver are up 1%+, but all metals are acting well with Ore and Rebar jumping over 3% as the Sichuan Earthquake sparks reconstruction thoughts. Energy Complex is up small, with Oil adding 40bp as a bigger Gasoline build is offsetting a bigger Oil draw