Opening View: Anxiety Palpable Ahead of Fed Speech

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After a tumultuous week, with headlines ranging from a $5 billion Bank of America ( BAC ) investment, Apple ( AAPL ) CEO Steve Jobs stepping down, and a massive hurricane plaguing the East Coast, it's finally Friday. At 10 a.m. Eastern, Federal Reserve Chairman Ben Bernanke will take the stage in Jackson Hole, Wyo. to keynote the annual conference. Stocks have been on a roller coaster ride for the past several weeks, with "debt," "downgrade," and "default" sending shock waves through the Street. As a result, many investors have their hopes pinned on today's event, with rumors swirling that Bernanke will use his speech to pledge another round of quantitative easing. However, many analysts have already expressed doubt that the Fed chairman will be able to promise anything that can help the current economic situation. Amid this high-anxiety backdrop, futures on all three major indexes are pointing moderately lower.

In earnings news... Aruba Networks (ARUN - 17.14) reported a fourth-quarter profit of $68.2 million, or 57 cents per share, compared to $423,000, or breakeven on a per-share basis, in the previous year. Excluding items, ARUN's earnings were 17 cents per share, matching analysts' expectations. Meanwhile, the company reported revenue of $113.8 million, surpassing analysts' expectations for revenue of $109.2 million. "Revenue from the existing customer base remains strong and we are especially encouraged by our rapid new customer acquisitions," said CEO Dominic Orr.

Pandora Media (P - 12.47) posted a second-quarter loss of $1.8 million, or 4 cents per share, compared to a profit of $1.6 million, or 4 cents per share, this time last year. Excluding one-time items, core earnings were 2 cents per share, compared to analysts' expectations for a per-share loss of 3 cents. Meanwhile, revenue skyrocketed a year-over-year 117% to $67 million, surpassing the Street's forecast for sales of $61 million. For the third quarter, Pandora expects to either break even or report a loss of 2 cents per share on revenue between $69.5 million to $72.5 million. Analysts, on average, were calling for the company to break even on a per-share basis, with expected revenue of $69.3 million in the third quarter.

Tiffany & Co. (TIF - 63.11) reported this morning that its second-quarter profit rose 33% to $90 million, or 69 cents per share, from $67.7 million, or 53 cents per share, a year earlier. Meanwhile, revenue jumped 30% to $872.7 million, while adjusted earnings arrived at 86 cents per share. These results crushed analysts' estimations for earnings of 70 cents per share on revenue of $785.6 million. TIF's CEO Michael Kowalski explained that the jeweler had been able to absorb rising metal and gemstone prices while improving margins. The CEO also commented that sales growth in the third quarter is already exceeding the group's expectations. Looking ahead, TIF upped its full-year forecast to a range of $3.65 to $3.75 a share -- a marked improvement from the previous range of $3.45 to $3.55 per share, and notably higher than the consensus forecast for full-year earnings of $3.55 per share. As a result, shares of the blue box behemoth are up nearly 6% in pre-market trading.

Earnings Preview

Today's earnings docket will feature reports from Frontline ( FRO ) and Madison Square Garden ( MSG ). Keep your browser at for more news as it breaks.

Economic Calendar

The economic calendar ends with a bang today, with all eyes turning to Jackson Hole and Fed Chairman Ben Bernanke's highly anticipated speech on "Near- and Long-Term Prospects for the U.S. Economy." Also slated to hit the Street are the Commerce Department's revised estimate of second-quarter gross domestic product ( GDP ), and the final Thomson Reuters/University of Michigan consumer sentiment index for August.

Market Statistics

Equity option activity on the Chicago Board Options Exchange (CBOE) saw 963,088 call contracts traded on Thursday, compared to 739,005 put contracts. The resultant single-session put/call ratio arrived at 0.77, while the 21-day moving average was 0.81.

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Overseas Trading

Asian markets ended mixed today, as traders around the globe held their breath ahead of a much-anticipated speech from Bernanke. A last-minute rush of bargain-hunting helped Tokyo-listed equities notch their first weekly gain in five, while Seoul snapped its own four-week losing streak. Meanwhile, in China, commodities giant PetroChina led energy stocks lower after a poorly received earnings report. By the close, Hong Kong's Hang Seng fell 0.9%, China's Shanghai Composite shed 0.1%, Japan's Nikkei added 0.3%, and South Korea's Kospi tacked on 0.8%.

Traders in Europe are also on edge, with regional markets modestly lower at midday. Germany is leading the decline, as speculation continues to swirl about a potential credit downgrade for one of the euro zone's leading economies. However, bank stocks are pointed higher after France, Italy, Spain, and Belgium opted to extend their respective short-selling bans. At last check, the German DAX is down 2.8%, the French CAC 40 is off 1.9%, and London's FTSE 100 is about 1.1% lower.

Currencies and Commodities

The dollar is looking weak this morning, as many analysts have grown doubtful that Bernanke will, in fact, signal another round of quantitative easing. At last check, the U.S. dollar index is down 0.3 point, or 0.4%. Meanwhile, oil has more than given up Thursday's gains, with the October-dated contract down 0.4 point, or 0.4%. Elsewhere, gold has staged a comeback, as investors flock to the "safe-haven" asset ahead of today's Fed speech. In pre-market trading, gold futures have ascended 26 points, or 1.5%, to hover around $1,789.20 an ounce.

Unusual Put and Call Activity:

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

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