China Cuts Interest Rates, Dow Jones Industrial Average Soars

The People's Bank of China slashed its interest rates for the first time in two years

Nov 21, 2014 at 9:02 AM
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The Dow Jones Industrial Average (INDEXDJX:DJI) is pointed sharply higher on news that the People's Bank of China cut interest rates for the first time in more than two years. The decision was spurred by weakness in the manufacturing sector and throughout the property market. Stateside, a pair of central bank officials -- Federal Reserve Governor Daniel Tarullo and New York Fed President William Dudley -- are scheduled to speak before the Senate Banking subcommittee on investigations this morning. Meanwhile, Foot Locker, Inc. (NYSE:FL) will step into the earnings confessional.

And now, on to the numbers...

Dow Jones Industrial Average, S&P and Nasdaq futures

Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are about 119 points above fair value.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1.2 million call contracts traded on Thursday, compared to 631,602 put contracts. The resultant single-session equity put/call ratio fell to 0.55, while the 21-day moving average edged down to 0.61.

NYSE and Nasdaq summary

Volatility indices

Currencies and Commodities

  • The U.S. dollar index is up 0.6% at 88.15.
  • Crude oil has popped 1.8% to $77.20 per barrel.
  • Gold is 0.9% higher -- and back atop $1,200 -- at $1,201.30 per ounce.
Currencies and commodities

Earnings and Economic Data

There are no notable economic reports today. FL will announce its earnings.

Overseas Trading

Stocks in Asia soared after China's central bank cut interest rates for the first time since 2012, in order to prop up its economy. In addition, Japanese Prime Minister Shinzo Abe opted to dissolve the lower house of parliament, forcing an early election. By the close, Japan's Nikkei was up 0.3%, while the Shanghai Composite had popped 1.4% to pace the major indexes. Elsewhere, South Korea's Kospi and Hong Kong's Hang Seng each gained 0.4%.

European markets are rallying on the aforementioned decision by the People's Bank of China, as well as dovish comments by European Central Bank (ECB) President Mario Draghi. Specifically, Draghi said the ECB will act swiftly to fight off low inflation, amid stagnant economic growth. Around midday, France's CAC 40 has spiked 2.4%, while Germany's DAX isn't far behind, up 2.1%. Meanwhile, London's FTSE 100 is 1.3% higher.

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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