Morning Market Update: Friday, August 27, 2010
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The Dow Jones Industrial Average (DJIA) closed below the 10,000 level yesterday for the first time since July 6, as a late-session sell-off finally overwhelmed the blue-chip barometer. However, with second-quarter gross domestic product (GDP) and a speech from Federal Reserve Chairman Ben Bernanke on tap later today, the situation could change rather quickly. In fact, optimism appears to be creeping onto Wall Street, as futures on the DJIA and the S&P 500 Index (SPX) are trading 25 points and 3 points above fair value, respectively. For support, watch the 9,950 and 9,800 levels for the Dow, and the 1,040 and 1,035 areas for the SPX. On the upside, 10,100 could be a major sticking point for the DJIA, while 1,060 remains a short-term ceiling for the SPX. Finally, keep a close eye on the 28-29 region for the CBOE Market Volatility Index (VIX), as a breakout above this region could mean a continued march higher for market volatility.
In equity news, Dell Inc. (DELL) fired another volley in the bidding war for 3PAR Inc. (PAR), lifting its bid for a second time in response to a competing bid from rival Hewlett-Packard Co. (HPQ). Dell’s current offer stands at $27 per share in cash for the data storage company, valuing the firm at $1.8 billion. Late last night, HPQ raised its offer to $27 per share from $24 per share, after Dell lifted its initial offer to $24.30 per share from $18 per share. In a separate release, 3PAR accepted Dell’s buyout offer of $27 per share. The deal is expected to close before the end of the year.
Elsewhere, Tiffany & Co. (TIF) posted a second-quarter profit of $67.7 million, or 53 cents per share, as sales in the Americas rose 8% to $668.8 million. Wall Street was expecting earnings of 53 cents per share on sales of $691.7 million. Looking ahead, Tiffany expects fiscal 2010 earnings from continuing operations of $2.60 to $2.65 per share, ahead of analysts’ expectations for earnings of $2.59 per share.
Finally, Novell Inc. (NOVL) reported that its fiscal third-quarter net income fell to $15.7 million, or 4 cents per share, as revenue dropped to $199 million. Excluding special items, Novell said earnings for the period were 6 cents per share. Analysts had expected the company to post earnings excluding items of 7 cents per share on $201.2 million in revenue.
Earnings Preview
On the earnings front, Frontline Ltd. (FRO) is scheduled to release its quarterly earnings report today.
Economic Calendar
We round out the week today with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan’s August consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 814,966 call contracts traded on Thursday, compared to 546,917 put contracts. The resultant single-session put/call ratio arrived at 0.67, while the 21-day moving average held at 0.64.
Currencies and Commodities
Equities may be headed higher, but currencies and commodities are trading close to breakeven ahead of this morning’s economic data. First up, the U.S. Dollar Index is fractionally lower in pre-market trading, slipping 0.02% to 82.92 at last check. Meanwhile, crude futures have a positive bias, with the lead contract up 20 cents at $73.56 per barrel. Finally, gold futures are up $1.90 at $1,239.60 an ounce in London. Don’t expect much from this trio until second-quarter GDP and Ben Bernanke have their say.
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Morning Market Update: Thursday, August 26, 2010
by Joseph Hargett (jhargett@sir-inc.com) 8/26/2010 8:02 AM
Earnings Preview
On the earnings front, Aruba Networks Inc. (ARUN), bebe stores inc. (BEBE), Novell Inc. (NOVL), and OmniVision Technologies Inc. (OVTI) are scheduled to release their quarterly earnings reports today.
Economic Calendar
Weekly initial jobless claims will arrive later this morning, while tomorrow rounds out the week with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan’s August consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,068,964 call contracts traded on Wednesday, compared to 664,930 put contracts. The resultant single-session put/call ratio arrived at 0.62, while the 21-day moving average held at 0.64.
Overseas Trading
Overseas trading is in fine shape this morning, as eight of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.36%. In Asia, regional markets rebounded from their recent lows, with Japan leading the way higher on speculation that the country may directly intervene in the yen’s rise versus the U.S. dollar. Turning to Europe, Wall Street’s resilience in snapping a four-session losing streak provided confidence for buyers, while strong earnings from French banking concern Credit Agricole added to the bullish momentum.
Currencies and Commodities
With investors slowly returning to the equities market, the U.S. dollar is beginning to lose its safe-haven appeal. However, indications that Japan is closer to taking direct action in limiting the yen’s rise versus the greenback has provided some lift for the U.S. currency. At last check, the U.S. Dollar Index was down 0.38% at 82.94. Given crude’s steep decline during the past several days, commodities traders have been more than happy to go bargain hunting, especially in the wake of a weakening U.S. dollar. In electronic trading, the front-month crude contract is up 85 cents at $73.37 per barrel. Finally, gold futures are also on the rise, with the lead contract up $4.30 at $1,245.60 an ounce in London – the metal’s highest point since June 30.
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Morning Market Update: Wednesday, August 25, 2010
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Earnings Preview
On the earnings front, American Eagle Outfitters (AEO), Guess?, Inc. (GES), JDS Uniphase Corp. (JDSU), and TiVo Inc. (TIVO) are scheduled to release their quarterly earnings reports today.
Economic Calendar
The economic calendar offers up July’s durable goods orders today, as well as new home sales, and the weekly report on U.S. petroleum supplies. Weekly initial jobless claims will arrive on Thursday, while Friday rounds out the week with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan’s August consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,055,972 call contracts traded on Tuesday, compared to 774,594 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average rose to 0.64.
Overseas Trading
Overseas trading looks abysmal this morning, as none of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.90%. In Asia, regional indexes attempted a rebound, but were smacked lower in late trading, with the Japanese Nikkei narrowly avoiding a 2% loss on the day. China’s Shanghai wasn’t as lucky. The rising yen remains Japan’s biggest concern, as the currency hit a 15-year high versus the U.S. dollar on Tuesday, sapping strength from the country’s exporters. Despite generally positive economic data, European markets are also headed broadly lower. Germany’s Ifo business-sentiment index climbed to its highest level since mid-2007, but this was largely overshadowed by Standard & Poor’s downgrade of Ireland’s credit ratings.
Currencies and Commodities
After closing at an 11-week low on Wednesday, oil prices regained some of that ground in Asian trading due to a spot of weakness in the U.S. dollar. Crude is holding onto some of that ground in electronic trading state-side, with the front-month contract rising 0.29% to $71.84 per barrel. Speaking of the U.S. dollar, the greenback took a breather in overnight trading, as traders repositioned themselves in the euro and the yen. However, the U.S. Dollar Index appears to be headed higher once again this morning, gaining 0.17% to trade at 83.29 at last check. Finally, gold futures have gained $5.50 in to trade at $1,238.90 in London – an eight-week high for the malleable metal.
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Morning Market Update: Tuesday, August 24, 2010
by Joseph Hargett (jhargett@sir-inc.com) 8/24/2010 8:03 AM
Earnings Preview
On the earnings front, Barnes & Noble Inc. (BKS), Burger King Holdings Inc. (BKC), Trina Solar Limited (TSL), and VeriFone Systems Inc. (PAY) are scheduled to release its quarterly earnings report today.
Economic Calendar
July’s existing home sales data is the lone piece of economic news hitting the Street today, while tomorrow offers up July’s durable goods orders, new home sales, and the weekly report on U.S. petroleum supplies. Weekly initial jobless claims will arrive on Thursday, while Friday rounds out the week with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan’s August consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,531,594 call contracts traded on Monday, compared to 595,272 put contracts. The resultant single-session put/call ratio arrived at 0.39, while the 21-day moving average slipped to 0.63.
Overseas Trading
Overseas trading is struggling this morning, as only one of the 10 foreign indexes that we track is in positive territory. The cumulative average return on the collective stands at a loss of 0.79%. In Asian trading, regional indexes finished broadly lower, with Japan leading the decline as the yen’s unabated advance applied significant pressure to exporters. The Japanese Nikkei Stock Average breached the 9,000 level to end at a 15-month low, dipping into what many technicians believe is bear-market territory. In Europe, mining and energy-related stocks are leading a broad regional decline, despite news that industrial orders rose 2.5% in the euro zone during June – up 22.6% over the same month last year.
Currencies and Commodities
The yen continues to be the currency to watch in global trading, as the Japanese currency tagged a 15-year high versus the U.S. dollar, despite strong words against the currency’s continued appreciation from Japanese Finance Minister Yoshihiko Noda. Japan hasn’t intervened in the currency markets in about five years, but Noda threatened to do just that in order to keep the yen’s rise in check. Despite weakening against the yen, the U.S. dollar remains strong across the board versus the rest of its major competitors, sending the U.S. Dollar Index 0.38% higher to 83.45 – the index’s highest level since July 21.
Commodities, which trade inversely to the greenback, have been hammered by the renewed strength in the dollar. In Asian trading, crude futures continued their recent decline, slipping 81 cents to $72.29 per barrel – near a three-month low. Finally, gold is retreating in London trading, with the lead contract pulling back $8.80 to $1,219.70 an ounce after the malleable metal hit a one-month high on Monday.
On the earnings front, Barnes & Noble Inc. (BKS), Burger King Holdings Inc. (BKC), Trina Solar Limited (TSL), and VeriFone Systems Inc. (PAY) are scheduled to release its quarterly earnings report today.
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Morning Market Update: Monday, August 23, 2010
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by Joseph Hargett (jhargett@sir-inc.com) 8/23/2010 7:57 AM
Earnings Preview
On the earnings front, Focus Media Holding Limited (FMCN) is scheduled to release its quarterly earnings report today.
Economic Calendar
There are no major economic reports scheduled for release today. Tomorrow offers up July’s existing home sales data. On Wednesday, July’s durable goods orders, new home sales, and the weekly report on U.S. petroleum supplies will hit the Street. Weekly initial jobless claims will arrive on Thursday, while Friday rounds out the week with a second look at second-quarter U.S. gross domestic product and the final reading on the University of Michigan’s August consumer sentiment index.
Market Statistics
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,331,720 call contracts traded on Friday, compared to 967,871 put contracts. The resultant single-session put/call ratio arrived at 0.73, while the 21-day moving average rose to 0.64.
Overseas Trading
Overseas trading is mixed, as six of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.19%. Asian markets closed broadly lower, with Japan once again leading the decline as concerns grew that authorities may not step in and prevent a continued rise in the yen. Elsewhere, mining stocks were standouts, as shares gained after Australia’s weekend election failed to produce a clear winner. Deal making is helping to lift sentiment in the euro zone, sending European markets higher. Specifically, Old Mutual rose nearly 5% after HSBC Holdings said it’s in talks to acquire a majority stake in Old Mutual’s Nedbank Group.
Currencies and Commodities
With the euro struggling to move higher, the U.S. Dollar Index is once again flirting with resistance near its 10-week moving average. The greenback has pulled back a bit in early European trading, with the index down 0.11% at $82.97. Commodities have garnered some strength from this pullback in the dollar, with the front-month crude contract up 28 cents at $74.10 per barrel. Finally, gold is trading essentially flat, rising 50 cents to trade at $1,229.30 an ounce in London.
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