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Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- US markets are slightly red as Amazon is ordered to pay the EU €250 million in back taxes.
- Europe, and especially Spain, is lower as Catalan succession angst grows.
- Gold and other safe havens are rising.
Good Morning! US Futures under some pressure, led by Smallcaps as the Greenback weakens and the FANG Lower as AMZN hit on EU Tax Headers. A big sea of Red across Europe in very good volumes, as Catalan Angst ramping right now – IBEX hit for 2% to 7month lows, and Spain’s yields out almost 10bp against Bunds as the King’s speech was viewed as a “disaster” – Catalan President Puigdemont giving a speech at 3pmET. The DAX is falling small, as Tech and Fins break lower, offset by a rally in Healthcare. Italy’s market breaking lower by 1.5% as banks holding Spanish debt get hit. FTSE down 10bp as Miners rally, but Oil majors weigh in London and Tesco’s initial bad was smacked hard. Volumes more moderate in Asia, as China, Taiwan and South Korea remain closed – The TOPIX was up small, reversing early gains on negative Nissan headers – Hang Seng adds 70bp to yesterday’s rip higher as Chinese banks keep flying, and Aussie down 80bp as Retail and Banks got whacked
Fed Funds resting at 77% for a December Hike ahead of Yellen this afternoon, but that Greenback is under good pressure as doves, including Kashkari, circle around the FOMC chair. The Euro is shrugging off Catalonia, as PMIs come in better, while Sterling higher on UK Services PMI. The Yen is nearing week’s highs on risk-aversion, and we are seeing a sharp bid in Bunds and Gold as Spain headers spark haven flows, driving the US10YY southside of the 200d. The better PMIs have Nickel and Silver jumping this AM, while Copper is off small. Oil doesn’t care about the huge API draw, as another huge build in Gasoline stocks weighs. Beans are showing some life, while the grains look under pressure early.
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