Stock markets have been trading lower again overnight for the most part although US indices appear to be stabilizing. Index futures for the Dow, SPX and NASDAQ are down less than 0.2 percent while the FTSE is down 0.9 percent and the Dax is down 1.3 percent.
Eurozone data was mixed with unemployment and GDP improving but inflation lagging. This puts the ECB in a bit of a bind but a rising EUR suggests the street expects inflation to return with oil in recovery mode. JPY also rallied again overnight as stimulus speculation continues to unravel. USD remains on its back foot. Dallas Fed Kaplan suggested this morning in London that the street may be underestimating how soon the next rate increase could come leaving the door open to a June hike. This hasn’t had much impact as the dollar continues to price in two increases this year unlike the bond market which appears to be expecting zero or one at most.
The top performing major market overnight was Australia which caught a tailwind from a rally in resource stocks. With USD still sinking overnight sending gold and WTI to gains of over 1 percent again, Canadian resource stocks (particularly gold miners which dominated the TSX Thursday) may continue to attract renewed interest today. Energy stocks may also be in the spotlight, particularly integrated oils and refiners with Exxon Mobil (NYSE:XOM) reporting results and Phillips 66 (NYSE:PSX) coming in way below expectations.
We could see more action in the technology sector as well today. After the close yesterday, LinkedIn (NYSE:LNKD) and Amazon.com (NASDAQ:AMZN) posted very strong earnings and/or guidance which could attract attention overnight and into Friday. LinkedIn popped 20% in initial aftermarket trading, a big turnaround from last quarter’s massive post-earnings selloff. Facebook (NASDAQ:FB) may also be active again on follow through from its strong earnings report while the news that Carl Icahn has sold his shares may continue to drag on Apple (NASDAQ:AAPL).
It's the last day of the month and the day before a long weekend in much of Europe, so we could see some positioning ahead of next week's big PMI and payrolls reports. There is also still some data to deal with including US personal income and Chicago PMI plus monthly GDP and producer prices for Canada.