Japanese Recession Weighs On Dow Jones Industrial Average

Japan's gross domestic product unexpectedly fell in the third quarter

by Alex Eppstein

Published on Nov 17, 2014 at 8:16 AM
Updated on Apr 20, 2015 at 5:32 PM

The Dow Jones Industrial Average (INDEXDJX:DJI) is headed lower, pressured by Japan's latest gross domestic product (GDP) reading, which signaled the nation has entered a recession. On the domestic front, traders are awaiting the most recent Empire State manufacturing index, as well as industrial production and capacity utilization numbers. Meanwhile, pharmaceutical rivals Pfizer Inc. (NYSE:PFE) and Germany-based Merck announced a partnership to develop cancer immunotherapy drugs.

And now, on to the numbers...

Dow Jones Industrial Average, S&P and Nasdaq futures

Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are about 21 points below fair value.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1.31 million call contracts traded on Friday, compared to 694,455 put contracts. The resultant single-session equity put/call ratio dropped to 0.53, while the 21-day moving average held steady at 0.63.

NYSE and Nasdaq summary

Volatility indices

Currencies and Commodities

  • The U.S. dollar index is up 0.2% at 87.69.
  • Crude oil is down 0.8% at $75.21 per barrel.
  • Gold has gained 0.3% at $1,188.70 per ounce.
Currencies and commodities

Earnings and Economic Data

The Empire State manufacturing index, and reports on industrial production and capacity utilization, will kick off the week. Agilent (A), China Mobile Games (CMGE), JD.Com (JD), Tyson Foods (TSN), and Urban Outfitters (URBN) will flex their earnings muscle.

Overseas Trading

Stocks in Asia ended mostly lower on news that Japan is officially in a recession -- based on its third-quarter GDP, which unexpectedly contracted at an annualized rate of 1.6%. This development overshadowed the kickoff of the Shanghai-Hong Kong stock connect. By session's end, Japan's Nikkei had plummeted 3%, while Hong Kong's Hang Seng was down 1.2%. Posting more modest losses were the Shanghai Composite and South Korea's Kospi, which gave back 0.2% and 0.1%, respectively.

European markets are largely following their Asian peers lower, as Japan's recession has impacted sentiment throughout the region. London's FTSE 100 has retreated 0.2% on cautious economic comments from Prime Minister David Cameron, and despite outperformance among basic resources stocks. France's CAC 40 is 0.3% lower, even though the nation's finance minister opined France could top economic growth targets this year. Elsewhere, Germany's DAX is flat.

Overseas markets

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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