Opening View: Futures Flat as Bulls Hope for Promising Data

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Stocks are churning around the breakeven line this morning, as investors sit on the sidelines ahead of another deluge of economic data. Most notably, the Street is bracing for the weekly jobless figures, which bulls hope will -- like Wednesday's ADP employment report -- bolster optimism ahead of tomorrow's highly anticipated nonfarm payrolls report. In the meantime, though, traders are digesting an unexpected resignation at Berkshire Hathaway (BRKB - 85.46), American International Group's (AIG - 36.05) losing battle with the Fed, and earnings from The Mosaic Company (MOS - 80.45), amongst others. At last check, the Dow Jones Industrial Average (DJIA ) is slightly higher, while the S&P 500 Index (SPX ) is trading about one point lower.

Dow, S&P and Nasdaq futures

In equities news, Berkshire Hathaway (BRKB) executive David Sokol offered his resignation last night, which came as a "total surprise" to billionaire investor Warren Buffett, who many thought Sokol would succeed as CEO. The news comes just a little over a week after Buffett learned that Sokol purchased 100,000 shares of Lubrizol back in January, about a week before recommending Berkshire make a bid for the company. Nevertheless, Buffett maintained that the decision to offer $135 per share for Lubrizol was entirely his, and that Sokol mentioned in passing that he owned the stock when he first brought up the potential deal. "I have never had any authority at Berkshire to invest a dollar in stocks," Sokol told CNBC this morning, adding, "I don't believe I did anything wrong." Ahead of the bell, the shares of BRKB have backpedaled 2%.


Meanwhile, American International Group's ( AIG ) $15.7 billion bid for a pool of mortgage-backed securities was rejected by the Federal Reserve last night. The central bank said it will auction off the bonds -- part of a vehicle called Maiden Lane II -- instead, as public interest would be better served by unloading the assets "individually and in segments over time." At last check, AIG has given up about 1%.

On the earnings front, The Mosaic Company ( MOS ) last night announced that earnings more than doubled in the fiscal third quarter, thanks to record demand and supply uncertainties. For the quarter, the fertilizer firm earned $542.1 million, or $1.21 per share, on sales of $2.21 billion. Analysts, on average, were calling for a quarterly profit of $1.07 per share on revenue of $2.34 billion. Looking ahead, Mosaic expects demand to remain strong in the spring, especially for phosphate, which saw sales grow 50% and the average selling price increase 63% from the year-ago quarter. Ahead of the bell, the shares of MOS are trading fractionally lower.

Earnings Preview

The earnings calendar will feature reports from CarMax ( KMX ), DemandTec ( DMAN ), General Maritime Corp. ( GMR ), Krispy Kreme (KKD), and Lawson Software (LWSN). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Today we'll hear reports on weekly jobless claims, the Chicago purchasing managers index (PMI) for March, factory orders for February, and the annual crop-planting forecast from the Department of Agriculture. The Labor Department will take center stage ahead of Friday's open with its March nonfarm payrolls report. Consensus estimates are calling for an increase of 192,000, according to Dow Jones. Also on tap are construction spending for February, the ISM's manufacturing index, and domestic auto sales data for March.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,229,205 call contracts traded on Wednesday, compared to 662,529 put contracts. The resultant single-session put/call ratio fell to 0.54, while the 21-day moving average was flat at 0.62.

NYSE and Nasdaq summary

Volatility indices

Trading the News: A Contrarian View. Check out this special report from Bernie Schaeffer here.

Overseas Trading

Japanese stocks ended higher today, with major banks blazing the path into the black on end-of-fiscal-year buying pressure. By the close, Japan's Nikkei index added nearly 0.5%. For the month -- which slammed Japan with an earthquake and tsunami -- the index gave up 8.2%. Meanwhile, Shanghai-listed stocks retreated on concerns about monetary-policy tightening by China's central bank, though Hong Kong-listed shares gained ground on a batch of well-received earnings reports.

European markets were mostly lower, with H&M leading the laggards after confessing to a disappointing first quarter. Furthermore, statistic agency Eurostat said euro-zone inflation rose by an annual rate of 2.6% in March -- up from 2.4% in February, and higher than economists' expectations for a drop to 2.3%. At last check, the FTSE 100 has given up a modest 0.05%, France's CAC 40 has surrendered 0.4%, and Germany's DAX has bucked the trend to trade just north of breakeven.

Overseas markets

Currencies and Commodities

The U.S. dollar has continued Wednesday's retreat this morning, as the U.S. Dollar Index was seen hovering around 75.28. Elsewhere, crude futures are poised to bounce back from yesterday's modest slide. In electronic trading, the May crude futures contract has added almost 1% to flirt with $105.27 per barrel. Finally, gold futures have continued their upward momentum, adding almost 0.7% to linger near $1,434.10 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

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This article appears in: Investing , Options

Referenced Stocks: AIG , DMAN , GMR , KMX , MOS

Schaeffer's Investment Research

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