US futures are down this morning, while markets in Europe have come off session lows and are in the green as of 8:00 am ET. Markets in Asia closed mixed, with the NIKKEI and CSI down and the Hang Seng up. Oil is up this morning after dropping by almost $2 dollars a barrel over the past two days on a surprise increase in US gasoline stockpiles. Gold is down this morning as the dollar moves higher.
Market uncertainty is the theme today as stimulus talks continue and US officials claim Iran is taking steps to interfere in the US presidential election and Russia has obtained American voter information. “Iran and Russia have taken specific actions to influence public opinion related to our elections,” said Director of National Intelligence John Ratcliffe. With this news coming out, traders are now more concerned about a contested election.
Markets in Europe have rebounded from session lows, which were also the lowest levels seen in the past month. Besides a rise in Covid-19 cases, German consumer confidence fell more than expected.
Tesla reported strong earnings after the bell yesterday, beating on both earnings and revenue. This is the automaker’s fifth consecutive profitable quarter. TSLA is trading up this morning.
Southwest Airlines posted its largest ever loss in the third quarter. Revenue dropped 68% to $1.79 billion from $5.6 billion a year earlier. The airline lost $1.2 billion in the three months ended September 30, compared with a $659 million profit a year earlier. Southwest’s per-share loss was $1.99, better than analysts’ expectations of a $2.35 per share loss. The stock is up in the premarket.
Bitcoin crossed $13,000 overnight as the cryptocurrency surged after Paypal said it is launching a crypto service allowing users to buy, hold and sell the digital currency. Bitcoin is up over 80% year to date.
Yesterday was the October VIX expiration. At 9:00 am ET the VIX was trading at $30 and someone put down a decent sized sale basket close to the 9:20 am ET deadline. This drove the VIX settlement down to $29.07. October VIX futures settle based off the opening price of November SPX options.
The trade into emerging markets out of developed Europe continued yesterday. We saw sellers of BBEU and EFV, and buyers of IEMG. Other emerging market ETFs that were active yesterday include DEM, JHEM, PXH and SCZ.
ETFs that invest in Japan were active, as both BBJP and DXJ traded above average.
Fixed income has seen continued activity in municipal bond ETFs latly — PZA and HYD were both active. There were buyers of IGOV, FLRN, LMBS and ProShares Short 20+ Year Treasury fund TBF. HYG and SJNK saw sellers.
Bloomberg’s Eric Balchunas has released his latest breakdown of ETF flows by expense ratio. Year to date, 59% of all assets were invested in ETFs under 10 basis points, which is down from last year, where it was 68%.