The Morning Snapshot

The Morning Snapshot 6/1/16

US equity markets opened lower, with the S&P 500 -0.5% as China’s 50.1 PMI figure for May added to evidence that growth remains subdued after the economy expanded at the slowest pace in more than two decades. Manufacturing gauges for…

Domestic Stock Futures Higher on Bernanke’s Comments

Sentiment is higher this morning after Bernanke’s speech yesterday that came after market close in which he called for maintaining accommodation, with S&P 500 futures higher by +1%. The dollar is lower versus 21 of 23 major peers, weighed by market participants scaling back extreme long positions after the FOMC minutes were released yesterday; the dollar index is trading down by -1.2% . Most commodities, save crude oil and natural gas, are catching a bid on the day. Treasuries are gaining as are most sovereign bonds globally, with tens falling -4bps to 2.59%.

Sentiment Higher After Alcoa Earnings Beat Estimates

Sentiment is higher across most global asset classes after Alcoa’s earnings report sparked a wave of risk asset purchases with most emerging market currencies outperforming, while the dollar, franc, and yen are selling. The euro is underperforming most of its peers despite Greece winning the release of €3B in aid on continued stringent terms. Equities are higher while most sovereign yields are falling and relative the German Bund most yield spreads are tightening. Chinese consumer and producer prices are weighing on aluminum and copper, while crude oil continues a second day of declines. U.S. treasuries resumed declines that pushed yields to the highest levels since Aug. 2010.

Overall, Sentiment is Higher on The Day

Treasury yields remain near the highest levels since 2011 after last Friday’s jobs report came in better than expected, bolstering expectations that the Fed will begin tapering its asset purchase program sooner rather than later. Overall, sentiment is positive with the dollar losing ground versus its major peers, sovereign yields falling, and stocks rising. S&P 500 futures are higher by +0.4%, while across the pond the Euro Stoxx 50 is higher by +2.4%. Crude is trading down -0.6%, while gold and copper are trading +1.5% and +0.3% higher respectively.

Sentiment Mixed Before Chicago PMI, Consumer Confidence, and Fed Officials

Sentiment is mixed this morning, with risk-on trades dominating in Asia and risk aversion taking hold in Europe after the FT reported that Greece’s second privatization was at risk. The Euro Stoxx 50 was down -0.4%, consistent with widening sovereign debt spreads in the area to the German Bund. Domestically, S&P 500 futures are +0.3% higher before the Chicago PMI and Consumer Confidence data points are released. Treasury yields are declining, extending losses from the highest levels since 2011, with tens falling -2bps to 2.45%. Commodities are mixed with oil and copper gaining nearly +0.3%, while gold continued testing a 34-month low. The dollar index is nearly flat while the euro gains slightly and the yen is weakening above the 99 level. Investors will be listening to the Fed’s Stein and Williams, who are both set to speak about monetary policy separately today.