Schaeffer's Trading Floor Blog

Huge Day Ahead for Markets

EU Summit, Affordable Care Act, and JPMorgan have Wall Street all abuzz

by 6/28/2012 9:35 AM
Stocks quoted in this article:

Today is a huge day for the markets, with the two-day European Union (EU) Summit beginning and The Supreme Court set to rule on the constitutionality of the Affordable Care Act at 10:00 a.m. EST. Futures are lower ahead of the cash open, primarily because of weakness among European equity indexes and U.S. financials, and comments that have been made at the EU Summit thus far.

Spanish bond yields, an indicator that seemingly fell off everyone's radar this week, have once again surged back above 7%. This break above the psychological "line in the sand" is an indication that sovereign fear is once again on the rise across the pond. In addition to this, the German unemployment rate was reported overnight, and came in worse-than-expected. Macro fears are once again hogging the limelight and dictating market action.

JPMorgan Chase & Co. (NYSE:JPM - 36.78) announced that their "London Whale" trade that was previously reported at a loss of about $2 billion could now top $9 billion. The shares are trading more than 3% lower in the premarket, and obviously have an effect on the market as a whole. Financials, both domestic and international, should be a primary driver for today's action. Keep a close eye on these names for any divergences that could offer a trading opportunity or signal about the market at large.

Price action today will largely be dictated by news flow and/or rumors. If you don't have the ability to actively manage positions, you are probably best suited sitting this one out. If you are an active trader, some tickers of interest today will be JPM, Bank of America Corp (NYSE:BAC), Barclays PLC (ADR) (NYSE:BCS), WellPoint, Inc. (NYSE:WLP), Humana Inc. (NYSE:HUM), UnitedHealth Group Inc. (NYSE:UNH), Express Scripts Holding Company (NASDAQ:ESRX), Walgreen Company (NYSE:WAG), and Aetna Inc. (NYSE:AET), to name a few. Fast markets like the one that I'm expecting today are a dream come true for day traders, but can be disastrous to those walking into unfamiliar territory. Mind your risk, and realize that one rumor or piece of news can markedly change the rest of the day.

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