Good morning! If you missed Bespoke’s Paul Hickey on CNBC’s Fast Money last night discussing the Apple Watch, you can view the segment here.
Our Bespoke Morning Lineup is now out. Below is a brief snapshot of macro news events pulled from the intro to the Lineup. To view the full report and get news on individual stocks, click here if you’re already a subscriber, or sign up now for a 5-day free Bespoke Premium trial.
S&P 500: S&P 500 futures are trading up into the open this morning, with constrained overnight action, up 14 bps after trading as high as 2100 around 7:00 AM. Russell 2000 futures are tracking their large cap cousin as well, +8 bps. The S&P 500 closed yesterday right at the bottom of “overbought” territory: one standard deviation about its 50-day moving average, having moved off of new all-time highs set on Monday. Gains for the index have tended to slow pretty dramatically when in this sort of area; over the past year, average returns over the following week when at least one standard deviation above the 50-day are -10 bps, while returns when buying in while the index sits at least one standard deviation below its 50-day are 1.51%. On a technical basis, then, this looks like a middling place to add risk, although the Employment Situation Report tomorrow could add a catalyst.
Snapshot: Oil is continuing its gains from yesterday, with WTI up 66 bps to $51.87 and Brent 1.09% to $61.21. As we mentioned yesterday, oil continues to form a base around $50, despite exploding inventories here in the US; the inventory developments appear to be widening the spread between WTI and Brent dramatically, but the raw price action in WTI is making extreme bearishness on domestic US crude outright a harder proposition to justify. Early credit trading has Europe tighter once again, while US indices are opening tighter as well. Treasuries continue to edge higher in yield, with the whole yield curve edging up by about a basis point this morning. In Europe, EUR is down 23 bps ahead of the ECB (rate announcement at 7:45 was unchanged; Draghi due to speak at 8:30 AM), while bund yields nudge up above 38 bps on the ten year and peripheral spreads continue to decline modestly in the midst of a constructive equity day that has the Stoxx 600 up 50 bps on steady buying since the open. The BoE held its rates unchanged (as they have been for six years) and GBP is little-changed, down 15 bps versus the USD; the Bloomberg USD Index as a whole has seen one-way flows all night, up 22 bps.