From Dave Lutz of Stifel, Nicolaus...
Good Morning, and Happy Friday! US Futures are off small, after posting a new closing all-time high yesterday, with Nasdaq futures slightly outperforming into AAPL’s shareholder meeting today (I’m long AAPL). EU markets are under some slight pressure – as Spain’s sale of a Bankia stake has the Fins under pressure, and stronger Inflation data has the Hawks in charge, pressing the DAX off 30bp in very light volume. In Asia, weak economic data did nothing to boost the Nikkei, which lost another 50bp as volatility continues to spike there. Shanghai snapped back for 50bp, despite the Yuan taking another dive overnight as traders note the PBoC is being “very active” in weakening the FX. In EM – we have some stability in Ukraine, despite reports of more Russian army intrusion – as their FX bounces back from it’s sharp weakness, and both Hungary and Turkey’s equity markets are bouncing over 1%. Focus is on the EEM here in the States, which just managed it’s first close above the 50dma in 2014. Globally, it feels like Material and Tech shares are outperforming in the overnight, while Banks are under pressure globally again, led by a 1%+ drop in Europe.
The US 10YY is bouncing higher, as US and EU Debt got hit on the EU inflation number – but the US 10YY is failing to get upside of yesterday’s 2.67% peak after bouncing off the 200dma yesterday. The € is on 2014 peaks (stronger EU inflation data), and combined with the Yen’s strength has the DXY under the $80 level, and the weakest in 4 months. This is a tailwind for commodities, but I am seeing red across the board. Gold and Silver are under slight pressure, while Brent, WTI and Natty are all red despite the frigid temperatures here in the Northeast.
We have a active catalyst schedule today – at 8:30 we get US GDP, at 9 ISM Milwaukee, at 9:45 we get Chicago PMI (available at 9:40 for paying subscribers), at 9:55 U of Mich confidence, at 10:15 we have 4 Fed speakers (Stein, Kocherlakota, Evans and Plosser), at10:30 we hear from the BOE’s Carney, the Week’s smallest POMO is at 11, and we get the March POMO schedule, along with Agriculture price data at 3. On the close, we have the Monthly Russell Rebalance, and the MSCI Quarterly Review – and late tonight brings us China’s official PMI for February