Awaiting Monster Alibaba IPO

Economic Data

- (CA) Canada July Wholesale Trade Sales M/M: 0.3% v 0.6% prior
- (CA) Canada Aug CPI M/M: 0.0% v 0.0%e; Y/Y: 2.1% v 2.1%e; Consumer Price Index: 125.7 v 125.7 prior
- (CA) Canada Aug CPI Core M/M: 0.5% v +0.2%e; Y/Y: 2.1% v 1.8%e
- (US) Aug Leading Index: 0.2% v 0.4%e

US equity markets are on another tear higher this morning, with both the DJIA and the S&P500 putting in fresh all-time highs. As of writing, the DJIA is up 0.30%, the S&P500 is up 0.24% and the Nasdaq is up 0.11%.

Scotland has rejected independence (45% for Yes vs 55% for No) and now the conversation shifts to the possibility the region will be handed new powers by Britain which could amount to effective home rule. UK PM Cameron is expected to make an announcement soon regarding an overhaul of local governance in Britain, while Labor is calling for a constitutional convention. GBP/USD has given up nearly all of the big gains seen on yesterday's session, dropping from highs above 1.6520 to within pips of 1.6300 as FX traders sell the news. EUR/USD is tagging along on the move, with the pair testing below the lows seen on the 17th, to within striking distance of 1.2830. Robust dollar strength is punishing precious metals.

The Alibaba frenzy is on this morning as traders await the IPO open. Shares priced at $68 yesterday, meaning the Chinese ecommerce giant is raising around $21.8 billion, for the largest IPO in the history of the US stock market. Yahoo could make nearly $10 billion on the IPO, as it plans to sell about 122 million shares out of its ~22% stake in the company. YHOO has risen around 13% in the month up to today. Currently the shares are indicating around $80-83, with the open due sometime after 11:00ET. Note that the mention of a possible new deal with Alibaba has sent smallcap Chinese tech name CNET up more than 100% this morning. Many other names are moving on the IPO as well.

Last night Home Depot confirmed that there was a massive cyber attack on its operations that lasted five months and put 56 million credit cards at risk, making it a bigger attack than the Target breach last December. Home Depot's CEO apologized for the breach and said customers wouldn't be liable for fraudulent charges. In the release, the firm said third quarter is on plan and slightly raised its FY14 guidance. Shares of HD are up 1.6% this morning.

Oracle CEO Larry Ellison has stepped down, and two executives, President Mark Hurd and Safra Catz, have been named as his replacements. Ellison plans to remain at the company as chairman and CTO. In first quarter earnings, the firm's EPS and revenue missed expectations once again, and its guidance for second quarter wasn't great. Shares of ORCL are down 5% this morning, with more downside accruing after the open of cash trade.

Caterpillar August dealer sales metrics were poor: sales of machinery fell 10% for the three-month period ended in August, weighed down by sharp sales declines in Latin America. World-wide mining equipment sales were down 33% from the prior-year period, while construction equipment sales fell 1%. Shares of CAT are down 2% and TEX is down 1% in sympathy. 

Looking Ahead

- 17:00 (CO) Colombia July Trade Balance: No est v -$64.0M prior; Total Imports: No est v $5.0B prior