Morning Coffee Break - Wednesday March 27
Today’s Morning Coffee Break is finding U.S. equity futures are indicating a lower open this morning after yesterday’s push higher towards an all-time high of less than two points in the S&P 500.
The move was driven by U.S. housing data but was capped and is now weighing on this morning’s futures is renewed fears over the Cyprus banking crisis.
On the Cyprus front during the overnight Cyprus leadership is finalizing financial access control in order to reduce and hopefully eliminate a run on Cyprus banks. The country has been running on cash since the banks shut a week ago.
Leaders have worked out and agreed to a 10 billion euro or $12.8 billion bailout from the European lenders and will secure the load by levying those unsecure deposits.
Cypriot Finance Minister Michael Sarris made a statement earlier that the financial access control should be in place and ready by 10 a.m. CET time (Cyprus local time).
U.S. Economic Reports On Deck
Today’s economic calendar is somewhat light with month over month Pending Home Sales 10 a.m. ET with expectations of -0.3% and at 10:30 a.m. ET the Department of Energy will release Crude Oil Inventories. Analysts are looking for 1.5 million barrel build in today’s report.
Beware that Friday remains a busy economic data day but markets will be closed due to Good Friday.
Morning Coffee Break's Current Benchmarks
S&P 500 futures are higher currently at 1557.27
EUR/USD ticked higher to 1.2787.
U.S.10-year Treasury bond yields are at 1.863%
Gold ticked lower by -0.18% to $1,593.00
WTI Crude Oil is higher by 0.79 to $95.83
Commodities
WTI Crude Oil futures prices overnight during the European session ticked lower coming into the U.S. session by -0.53% to $95.83. Gold and silver pushed lower as well to $1,593.00 and $28.225 respectively. The interesting take-a-way overnight was Dr. Copper’s price action. Copper futures climbed by 0.07% during the overnight session even though recent reports find global inventories at 3 year highs. However, hedge funds are becoming more and more on copper, which why may explain the why copper future are reversing heading into the U.S. session. At 7:30 a.m. ET copper futures for May are lower by -0.46% to 3.427
Equity only readers can gain exposure to WTI Crude Oil through the United States Oil Fund (USO, quote) ETF that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The USO will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.
Equity only readers gain exposure to the gold through the SPDR Gold Shares Trust (GLD, quote) ETF that seeks to replicate the performance, net of expenses, of the price of gold bullion. The GLD trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. Readers can also access the gold market through the iShares COMEX Gold Trust (IAU, quote) ETF seeks to replicate, net of expenses, the day-to-day movement of the price of gold bullion.
Currencies Markets
Cyprus continues to send fear into the currency markets – focusing its fear on the euro and the repercussions of terms of the Cyprus bailout could be imposed on the euro zone members in need of a bailout. The EUR/USD is trading not only below the 1.30 level but is now trading with a 1.27 handle to 1.2776 down -0.66% going into the U.S. session. The euro is lower against the majors – see currency map below or for a live currency price matrix checkout. ( please note the page loads a little slow due to all of the quote being pulled)
Morning Coffee Break Earnings Watch
Earnings are beginning to tapper off. Today's earnings watch is focused at close with:
Phillips Van Heusen Corp. (PVH, quote)
Morning Coffee Break's Stock Pre-Market Stock Watch
This morning we are not looking at stock but rather a currency ETF Currency Shares Euro Trust (FXE, quote) as measure of sentiment in the euro zone and Cyprus.
Morning Coffee Break' Bottom Line
With little economic news on deck look for headlines out of Cyprus and European Union to drive sentiment after the Pending Home sale and WTI Crude Oil Inventory Report. Good luck trading.
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