| MARKET CONDITIONS |
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are pointed higher this morning, despite the U.S. being hours away from maxing out its borrowing authority. Investors are cautiously optimistic that congressional leaders will hammer out a resolution to avoid the risk of default. The Senate is slated to resume negotiations at noon. Meanwhile, Fitch Ratings announced last night that it has put the country's 'AAA' credit rating on watch amid the inaction in Washington. Elsewhere, "The 10-year yields closed above the key 2.7% level yesterday," said Schaeffer's Senior Equity Analyst Bryan Sapp. "I'll be watching this closely, as a U.S. default will likely spur a big spike in bond yields."
On the earnings front, Bank of America Corp (NYSE:BAC), Yahoo! Inc. (NASDAQ:YHOO), and PepsiCo, Inc. (NYSE:PEP) are among the notable names that should garner some attention following the release of their respective results.
On the earnings front, Bank of America Corp (NYSE:BAC), Yahoo! Inc. (NASDAQ:YHOO), and PepsiCo, Inc. (NYSE:PEP) are among the notable names that should garner some attention following the release of their respective results.
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are roughly 62 points above breakeven.
Market Statistics
The Chicago Board Options Exchange (CBOE) saw 1,076,966 call contracts traded on Tuesday, compared to 711,160 put contracts. The resultant single-session put/call ratio rose to 0.66, while the 21-day moving average edged higher to 0.63.
Market Statistics
The Chicago Board Options Exchange (CBOE) saw 1,076,966 call contracts traded on Tuesday, compared to 711,160 put contracts. The resultant single-session put/call ratio rose to 0.66, while the 21-day moving average edged higher to 0.63.
From the Trading Floor
"Anecdotally, I'm seeing a lot of 'buy the rumor, sell the news' talk about a potential deal," noted Sapp. "The general consensus seems to be that Congress will get something done before tomorrow's deadline, but you should be selling into that. Typically, when everyone agrees on something, it's not right. Should they get something done before the default, I would look for a more prolonged rally than everyone is expecting. Contrarily -- in the (unlikely) event that lawmakers do allow a default -- the markets would most likely get hammered, given the expectations that a resolution will be reached."
Currencies and Commodities
"Anecdotally, I'm seeing a lot of 'buy the rumor, sell the news' talk about a potential deal," noted Sapp. "The general consensus seems to be that Congress will get something done before tomorrow's deadline, but you should be selling into that. Typically, when everyone agrees on something, it's not right. Should they get something done before the default, I would look for a more prolonged rally than everyone is expecting. Contrarily -- in the (unlikely) event that lawmakers do allow a default -- the markets would most likely get hammered, given the expectations that a resolution will be reached."
Currencies and Commodities
- The U.S. dollar index is down 0.2% in pre-market trading, with the currency lingering near 80.35.
- Ahead of tomorrow's debt ceiling deadline, crude oil is flirting with a 0.1% lead, with the front-month contract last seen at $101.29 per barrel.
- Elsewhere, gold futures are looking to erase Tuesday's modest losses, with gold for December delivery up 0.8% at $1,283.50 an ounce.
Earnings and Economic Data
Slated for release today is the NAHB/Wells Fargo housing market index and the Federal Reserve's Beige Book. Making an appearance in the earnings confessional are American Express (AXP), International Business Machines (IBM), BAC, eBay (EBAY), PEP, Abbott Laboratories (ABT), Bank of New York Mellon (BK), BlackRock (BLK), Comerica (CMA), Crown Holdings (CCK), KeyCorp (KEY), Kinder Morgan Energy (KMP), Mattel (MAT), MGIC Investment Corp. (MTG), Noble Corporation (NE), Northern Trust (NTRS), PNC Financial Services (PNC), SanDisk (SNDK), Select Comfort (SCSS), Stanley Black & Decker (SWK), Steel Dynamics (STLD), St. Jude Medical (STJ), United Rentals (URI), U.S. Bancorp (USB), Winnebago Industries (WGO), and Xilinx (XLNX).
Overseas Trading
Asian markets turned in another mixed finish on Wednesday. Most eyes stayed focused on U.S. lawmakers, who continue to work toward a budget compromise ahead of tomorrow's debt ceiling deadline. Japan's Nikkei edged higher after a choppy trading day, closing up 0.2% to bring its winning streak to six. South Korea's Kospi dipped 0.3%, and the Hong Kong Hang Seng lost 0.5%. The Shanghai Composite underperformed, dropping 1.8% to a one-week low as investors in the region wait to digest several data points on Friday, including third-quarter gross domestic product (GDP) and retail sales.
European stocks are skewed lower amid negotiations in Washington, D.C., with defensive issues from the telecom and utility sectors outperforming. Across the pond, unemployment in the U.K. held steady at 7.7% in June through August, in line with estimates. The number of people in Britain filing for unemployment, however, dropped by its widest margin since June 1997. At last check, London's FTSE 100 had slipped 0.5%, the French CAC 40 was down 0.8%, and the German DAX was flirting with a 0.1% loss.
Slated for release today is the NAHB/Wells Fargo housing market index and the Federal Reserve's Beige Book. Making an appearance in the earnings confessional are American Express (AXP), International Business Machines (IBM), BAC, eBay (EBAY), PEP, Abbott Laboratories (ABT), Bank of New York Mellon (BK), BlackRock (BLK), Comerica (CMA), Crown Holdings (CCK), KeyCorp (KEY), Kinder Morgan Energy (KMP), Mattel (MAT), MGIC Investment Corp. (MTG), Noble Corporation (NE), Northern Trust (NTRS), PNC Financial Services (PNC), SanDisk (SNDK), Select Comfort (SCSS), Stanley Black & Decker (SWK), Steel Dynamics (STLD), St. Jude Medical (STJ), United Rentals (URI), U.S. Bancorp (USB), Winnebago Industries (WGO), and Xilinx (XLNX).
Overseas Trading
Asian markets turned in another mixed finish on Wednesday. Most eyes stayed focused on U.S. lawmakers, who continue to work toward a budget compromise ahead of tomorrow's debt ceiling deadline. Japan's Nikkei edged higher after a choppy trading day, closing up 0.2% to bring its winning streak to six. South Korea's Kospi dipped 0.3%, and the Hong Kong Hang Seng lost 0.5%. The Shanghai Composite underperformed, dropping 1.8% to a one-week low as investors in the region wait to digest several data points on Friday, including third-quarter gross domestic product (GDP) and retail sales.
European stocks are skewed lower amid negotiations in Washington, D.C., with defensive issues from the telecom and utility sectors outperforming. Across the pond, unemployment in the U.K. held steady at 7.7% in June through August, in line with estimates. The number of people in Britain filing for unemployment, however, dropped by its widest margin since June 1997. At last check, London's FTSE 100 had slipped 0.5%, the French CAC 40 was down 0.8%, and the German DAX was flirting with a 0.1% loss.
Unusual Put and Call Activity:
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