Opening View: DJIA Set to Rebound on German Sentiment, Pre-Fed Optimism

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U.S. stock futures are pointed higher ahead of the bell, bolstered by encouraging signs out of Europe and optimism ahead of the Federal Reserve's afternoon address. Specifically, Germany's ZEW indicator of economic sentiment ticked higher in December, snapping a nine-month streak of declines. Furthermore, a better-than-expected bond auction in Spain has also helped to lift sentiment in pre-market trading. On the home front, meanwhile, investors are awaiting the Federal Open Market Committee's (FOMC) policy statement at 2:15 p.m. Eastern, where Wall Street is expecting the central bank to maintain its stance on rock-bottom interest rates. Against this backdrop, the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) are set to chip away at their already-hefty weekly deficits .

Dow, S&P and Nasdaq futures

In equities news, Southwest Airlines (LUV - 8.43) this morning confirmed that it placed a hefty order with Boeing (BA - 70.90). Specifically, the airliner said it ordered 150 of the company's 737 MAX jetliners -- a purchase valued at $19 billion, marking Boeing's largest order in history. As such, Southwest is the first customer to finalize an order for the more fuel-efficient aircraft.

In earnings news, biotech concern Avanir Pharmaceuticals (AVNR - 2.28) reported a fourth-quarter loss of $18 million, or 14 cents per share, compared to a loss of $9.7 million, or 10 cents per share, in the same period last year. On the other hand, revenue surged to $4.8 million, five times its year-ago revenue of $726,000. While AVNR's bottom-line results matched Wall Street's expectations, its top line exceeded forecasts for revenue of $4.5 million. At last check, AVNR is pointed 7.5% higher.

Earnings Preview

Today's earnings docket will feature reports from Best Buy ( BBY ), FactSet Research ( FDS ), and Pantry ( PTRY ). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Reports are due out today on retail sales and business inventories. Then, at 2:15 p.m. Eastern, the FOMC will announce its latest policy decision. Wednesday's docket features data on import and export prices, as well as the usual update on domestic petroleum supplies. A slew of economic reports are due out on Thursday, including the producer price index (PPI), the Empire State manufacturing index, the Philadelphia Fed index, industrial production and capacity utilization, and weekly jobless claims. Finally, the week's slate of economic events wraps up on Friday with the release of the consumer price index ( CPI ).

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 941,005 call contracts traded on Monday, compared to 569,299 put contracts. The resultant single-session put/call ratio arrived at 0.60, while the 21-day moving average was 0.70.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended lower across the board today, bogged down by the prospect of wide-ranging debt downgrades for the European Union (EU) . The rising anxiety applied pressure to miners and exporters, with PetroChina and Sony among the notable laggards. Additionally, tech stocks took a turn south after a sales warning from U.S. chip giant Intel. By the close, South Korea's Kospi and China's Shanghai Composite both fell 1.9%, Japan's Nikkei lost 1.2%, and Hong Kong's Hang Seng gave up 0.7%.

Conversely, the major European indexes are recovering from Monday's steep losses. A few buyers were lured in from the sidelines by a report showing an unexpected improvement in German investor sentiment during early December. However, the financial sector remains a pocket of weakness following EU downgrade warnings from both Moody's and Fitch. At last check, London's FTSE 100 is up 1%, the German DAX has added 0.9%, and the French CAC 40 has tacked on 0.2%.

Overseas markets

Currencies and Commodities

The greenback is taking a breather this morning, with the U.S. dollar index down almost 0.1%. Crude oil, meanwhile, is on the rebound, with the front-month contract last seen 0.6% higher at $98.35 per barrel. Finally, gold futures are also fractionally higher in early action, tacking on 40 cents to flirt with $1,668.60 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.



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This article appears in: Investing , Options

Referenced Stocks: BBY , CBOE , CPI , FDS , PTRY

Schaeffer's Investment Research

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