- Brendan McDermid/Reuters
Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
Morning! Ugly sea of red out there, with US Futures down 50bp – Papers blaming the weaker China data yesterday weighing on Commodities, thus equities. Selling in the US seemed to accelerate yesterday as peeps flushed into Treasuries on headers Trump is considering Mohamed El-Erian for Federal Reserve Vice Chair. DAX is getting mushed for 1.3%, as the Euro Mining Index off nearly 2% and Energy stocks weaker too, with funds flowing from the majors globally. Only sector I see in the green, Aerospace plays acting better as Airbus locks down a $50bn order. FTSE down 60bp, Telecom weaker in London as Talk-Talk smoked for 17% and Miners off, but weaker Sterling helping cushion losses. Very Heavy Volume overall, with most exchanges trading 50% above trend.
It was a Nasty overnight in Asia, with decent losses in heavy volume – Nikkei smoked for 2% as GDP posted light – Hang Seng lost 1%, with Tencent hit for 2% despite better #s – Shanghai down 80bp – KOSPI lost 30bp, but that KOSDAQ up another 1.5%! – Aussie down 4 straight, losing 60bp as the Mining stocks hit 2% on average, and the MSCI EM Index hit 3week lows
Heavy buying in Bunds smashed Germany’s 10YY downside 40bp, hitting the US 10YY towards the 200d into Retail Sales and Inflation Data. Focus remained also on China’s 10YY hovering around 4%. The DXY is getting mushed to 2week lows. Euro making gains, continuing to squeeze thru $1.18 as buying continues post that strong German GDP Print yesterday. $/Y downside 113, while A$ hit to 5month lows on weaker wage data.
All eyes on the Commodity complex, where Ore was smoked for 5% as Winter Curbs kick in, while Nickel was 6% limit down in Shanghai. US Futures show Copper off 60bp, Zinc 1.5% and Nickel 2.2%. That said, Gold a unimpressive 20bp gain despite global “Risk Off” and a falling Greenback. Oil has seen nothing but downticks since the International Energy Agency talked up US shale oil production and Russia said they’d go for a 3month extension of cuts, not 9. API data last night adding weight to downside as it showed bigger builds in both crude oil and gasoline.