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China will now allow fund managers to lend stocks for short selling
The Dow Jones Industrial Average (DJIA) is set to plunge triple digits out of the gate, following late-breaking news out of China and the latest round of corporate earnings. Specifically, mainland regulators agreed to allow fund managers to lend stocks for short selling, and expanded the roster of names available to short. Also, the Street is digesting mixed quarterly results from blue chips General Electric Company (NYSE:GE) and American Express Company (NYSE:AXP). Finally, traders are treading lightly ahead of the latest consumer price index (CPI), which could impact the timing of the Federal Reserve's planned interest-rate hike.
And now, on to the numbers...
Futures on the Dow Jones Industrial Average 2 Minute (DJIA) are nearly 113 points below fair value.
Market Statistics
The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Thursday, compared to 708,283 put contracts. The resultant single-session equity put/call ratio jumped to 0.67, while the 21-day moving average remained at 0.64.
Currencies and Commodities
- The U.S. dollar index is off 0.1% at 97.35.
- Following a sixth straight day of gains, crude oil has dipped 0.5% to trade at $57.83 per barrel.
- Gold has tacked on 0.5% at $1,203.80 per ounce.
Earnings and Economic Data
The week closes out with the latest CPI and the Thomson Reuters/University of Michigan consumer sentiment index. Honeywell International (HON) and Seagate Technology (STX) will unveil their quarterly results. To see what is on next week's agenda, click here.
Overseas Trading
Asian stocks ended the week mixed, as investors digested the latest batch of earnings reports out of the U.S. China's Shanghai Composite raced to another new seven-year high -- up 2.2% on hopes of central bank stimulus. South Korea's Kospi also gained, settling 0.2% higher. Meanwhile, Japan's Nikkei gave back 1.2% ahead of next week's docket of corporate results, and Hong Kong's Hang Seng slipped 0.3%.
European bourses are sharply lower at midday, amid concerns over Greece's looming International Monetary Fund (IMF) debt repayment, and skepticism ahead of next week's meeting of eurozone finance ministers. Traders are also responding to new short-selling regulations out of China. London's FTSE 100 was last seen down 0.8%, despite a six-year low in unemployment. Also, the French CAC 40 and German DAX are off 1.2% and 1.8%, respectively.
Unusual Put and Call Activity:
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