Opening View: SPX Set to Defy Halloween History on Fading Euro-Zone Euphoria

By
A A A

U.S. stocks are set to start the week on a sour note, thanks to fading optimism over last week's highly anticipated euro-zone debt deal . Furthermore, it appears Wall Street is taking a cautious approach to a week chock-full of notable items on the agenda, including a summit of Group of 20 (G-20) leaders, a press conference with Federal Reserve Chairman Ben Bernanke, and an onslaught of unemployment data. In the meantime, traders are busy digesting the latest headlines surrounding MF Global Holdings (MF), which is reportedly on the verge of filing for Chapter 11. Against this backdrop, the Dow Jones Industrial Average (DJIA) is trading more than 100 points south of fair value, while the broader S&P 500 Index (SPX) is set to defy Halloween history .

Dow, S&P and Nasdaq futures

In equities news, MF Global Holdings Ltd. (MF - 1.20) is nearing a deal to file for bankruptcy protection and sell assets to Interactive Brokers Group ( IBKR ), according to media reports. IBKR will likely make an initial bid of about $1 billion during a court-supervised auction, The Wall Street Journal said. What's more, according to the latest speculation, MF is now suspended from doing business with the Federal Reserve Bank of New York.

In earnings news, Humana Inc. (HUM - 80.35) said third-quarter earnings rose 13% to $444.8 million, or $2.67 per share, from last year's profit of $393.2 million, or $2.32 per share. Excluding items, the insurance issue said earnings jumped to $2.54 from $2.01 per share. Sales, meanwhile, increased 11% to $9.3 billion. The results topped expectations, as analysts were calling for a per-share profit of $2.02 on revenue of $9.25 billion. Looking ahead, the company upped its 2011 earnings forecast to a range of $8.35 to $8.40 per share, and projected 2012 earnings of $7.40 to $7.60 per share. Analysts, on average, were expecting a per-share profit of $7.65 for 2011, and $7.79 for 2012.

Earnings Preview

Today's earnings docket will also feature reports from Allstate ( ALL ), AvalonBay Communities ( AVB ), Cavium ( CAVM ), Haemonetics ( HAE ), Leap Wireless (LEAP), Taser International (TASR), Anadarko Petroleum (APC), and W&T Offshore (WTI). Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar begins today with the release of the Chicago purchasing managers index (PMI) for October. The ISM manufacturing index is set to hit the Street on Tuesday, along with data on construction spending and auto sales. The monthly onslaught of jobs data begins on Wednesday, with ADP's private-sector employment report and the Challenger, Gray & Christmas update on monthly job cuts both due for release. Around midday, the Federal Open Market Committee (FOMC) will announce its latest monetary policy decision, and a 2:15 p.m. press conference will follow. As usual, Thursday's calendar features weekly jobless claims. Also on the day's docket are the ISM services index, third-quarter productivity and labor costs, and factory orders. Bright and early Friday morning, all eyes will be on the Labor Department's nonfarm payrolls report for October.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,098,158 call contracts traded on Friday, compared to 613,245 put contracts. The resultant single-session put/call ratio arrived at 0.56, while the 21-day moving average was 0.68.

NYSE and Nasdaq summary

Volatility indices

Overseas Trading

Stocks in Asia ended lower today, giving back a portion of the previous week's outsized gains. A notable forex maneuver was in the spotlight, after the Ministry of Finance asked the Bank of Japan to sell an undisclosed amount of yen in order to temper the high-flying currency's momentum. The move provided some minor relief for Japanese exporters, such as Toyota -- but sector peer Honda didn't fare as well, thanks to reports suggesting the automaker could face serious production snags due to flooding at its Thailand facilities. Meanwhile, strength in the U.S. dollar versus the newly stifled yen prompted weakness in commodities, which weighed on resource stocks. By the close, South Korea's Kospi slipped 1.1%, Hong Kong's Hang Seng declined 0.8%, Japan's Nikkei shed 0.7%, and China's Shanghai Composite gave up 0.2%.

Similarly, miners are pacing the laggards in Europe, as a surging greenback weighs on metals prices. French banks have also taken a turn for the worse, after Citigroup trimmed its price targets on BNP Paribas and Societe Generale. Elsewhere in the financial sector, Barclays is trading modestly higher in the U.K. on the heels of its third-quarter earnings report. At last check, the French CAC 40 is off 1.8%, the German DAX is down 1.6%, and London's FTSE 100 is 1.1% lower.

Overseas markets

Currencies and Commodities

The greenback has continued its upward momentum this morning, with the U.S. dollar index up 1.1% at last check. Crude futures, meanwhile, have extended their recent pullback, with the front-month contract down 0.7% at $92.66 per barrel. Finally, gold futures are also on the decline ahead of the bell, with the yellow metal last seen 1.4% lower at $1,723 an ounce.

Currencies and commodities

Unusual Put and Call Activity:

Due to an error with our data provider, the Unusual Put and Call charts are unavailable this morning. We apologize for any inconvenience.

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.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: ALL , AVB , CAVM , HAE , IBKR

Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Investing In Commodities
Investing In Commodities            

Stocks

Referenced

Most Active by Volume

74,282,785
  • $10.84 ▲ 11.64%
60,794,128
  • $17.12 ▲ 0.71%
55,628,662
  • $35.59 ▼ 1.00%
55,306,290
  • $116.47 ▲ 0.14%
55,118,241
  • $39.75 ▼ 0.43%
53,597,648
  • $9.41 ▲ 8.29%
41,889,990
  • $47.98 ▼ 1.48%
35,692,375
  • $97.34 ▼ 0.57%
As of 11/21/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com