Market Overview

Benzinga Market Primer, Tuesday June 12

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US stock futures are higher this morning, recouping some losses from yesterday when we saw a 2% reversal in stocks to close on the absolute lows. Stocks opened on high's yesterday, as traders hoped that the Spanish bailout would be a real game changer. However, fears soon rose over the amount of subordination of private sector creditors, the mechanism for which the money will get to the banks, and where the money will actually come from.

All eyes are on the Greek elections this weekend and traders will be clamoring to see who wins, by how much, and if a majority can be had. Overnight,

  • Cyprus hinted that it may apply for an EU bailout due to Greek exposure.
  • Noted economist Nouriel Roubini stated that letting Greece go would destroy the euro.
  • Fitch sees a third LTRO as increasingly likely and says that a Greek exit would surely lead to another round of cheap liquidity.
  • Chicago Fed's Evans supports an extension of Operation Twist, arguing that more aggressive monetary policy will cut jobless rate faster.

On today's agenda, traders can look forward to:

  • NFIB Small Business Optimism at 7:30 am. Consensus is 94 versus the prior 94.5
  • Import and Export prices will be reported at 8:30 am. For exports, the market is looking for a 0.1% increase month-over-month in prices against the prior 0.4% increase. For imports, the market is looking for a -1.1% change in prices month-over-month vs. the prior -0.5%.
  • The US is set to auction 4-week and 3-year debt today.

Currently, US equity futures are higher across the board, with S&P 500 futures higher by about six points and NASDAQ futures up 12.5. The euro is marginally higher this morning, currently sitting just above 1.25 at 1.2502 against the US dollar, basically right where it was yesterday. The dollar index is ever so marginally lower on the day, with emerging market currencies trading sharply lower. Oil is below $82.50 this morning and nat gas futures are trading at $2.18. Copper is flat at $334.00 and gold is slightly lower at $1,592.00. Silver is trading slightly lower also near $28.52.

The yield on the benchmark US 10-year bond is higher this morning, up to 1.75%. Recently, all-time lows were made below 1.5%. The yield on the Spanish 10-year is sitting just below 6.5% and the yield on the Italian 10-year is now at 6.114%. This follows yesterday's move where both yields moved about 50 basis points.

Asian markets opened low and closed off the lows but remain in the red with the Nikkei being the notable laggard, down more than 1%. In Europe, stocks are higher, led by Germany and Spain, with Italy being the notable laggard, down 0.5%.

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