In an overnight session with many Asian equity markets closed, it’s not a surprise that SPX futures only moved in a 3 handle range overnight.
- India Surprise Hikes Rate to 7.50% from 7.25% – This was the first move by new central bank governor Raghuram Rajan (an admirable macroeconomist if there ever was one) to help curb inflation that exceeded 9%. That move might also mitigate further Indian rupee depreciation, though capital outflows are likely to continue if U.S. rates remain elevated, QE or not. The Indian equity index is currently down more than 2%.
- Asia Quiet as China, South Korea, and Taiwan All Closed – Many of the other markets in Asia were closed. Japan traded close to flat the entire session. The emerging markets outside of India were also mostly lower, led by the biggest gainer on Thursday, Indonesia.
- European Markets Slightly Red Ahead of German Elections This Weekend – European markets have traded between flat and -0.5% this morning. Merkel and her CDU party are very likely to win the Sept 22 German elections. The key to watch for in the election results is how many seats the marginal parties win, as it could affect the terms of any future bailouts of the European peripheral countries (most notably Greece, who is likely going to need more money soon).
- Apple’s iPhone 5s and 5c start selling today – Hong Kong, Singapore, Germany France, the U.K., and the U.S. are the first countries to get the phones. Most analysts estimate opening-weekend sales between 5 and 7 million phones. Last year, AAPL sold a little over 5 million units, and the stock was hit as analysts had been more optimistic.
- Gold and Silver Decline Overnight – Most commodities and bonds traded close to flat, but both gold and silver are down in gradual selling in the past 2 hours. Gold is down more than 1%, and silver is down more than 2%. Neither commodity was able to get above its 20 day moving average in the past 2 days.