Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before markets open in New York.
Good Morning! US Futures are starting under slight pressure as CSX, JPM and INTC disappointed last night, but have been recovering from lows as BAC pops 1% on numbers and SNDK and MU rally on M&A chatter. Overseas markets are a sea of red however – led by a 90bp drop in the DAX as Fins and Materials fall under pressure. The FTSE not faring much better, off 70bp despite Glencore staging a relief rally. Volumes across the continent remains 20%sh below normal. Over in Asia, Subdued China inflation numbers increase potential easing but could not lift Shanghai as it closed 1% lower, while the tech-heavy Kospi closed off 50bp. Faltering sentiment around housing, commodities and China weighted heavy in Japan, which saw the Topix lose over 2% as the Yen continued to gather upward momentum. Our Hawaii desk noted that “Short selling continues to pick up as market lacks conviction.”
The US 10YY is off small, following German yields lower as China’s inflation data came in way weaker than expected, and the new BoE board member noted that further easing is on the table. Fed Fund Futures here in the States continue to lower probability of a 2015 lift, as Brainard and Tarullo yesterday said no rate hike coming soon (Both 2015 and 2016 voters). The $ is losing ground against most majors, causing a tailwind for commodities – but most are firmly lower. Industrial metals like Nickel, Platinum and Copper are all falling, while Gold is retreating from 3 ½ month highs and a 200dma test early. The Crude Complex is basically unchanged into inventory data tonight, while profit taking from the last week’s surge higher grips the grains.
Scheduled catalysts today include PPI and US Advance Retail Sales for September at 8:30, ahead of Business Inventories at 10. The “Main Event” today is at 2pmET when the Federal Reserve Releases the Beige Book. After the close tonight we hear from HON, GE, KSU and NFLX among others, and that API data for Crude hits at 4:30 (build of ~2.6M expected). The Democratic debate last night glossed over Biotech pricing, but had some focus on Guns and Big Banks. Down in Washington, the Senate and House remain in recess – at 9am FCC Commissioner Lee Goodman speaks at NYU-sponsored event on campaign finance -the Supremes hear arguments over FERC’s “demand response” rule at 11am – and FTC Commissioner Maureen Ohlhausen delivers remarks at Wireless Technology Assn event on 5G at 11:15.