China's Currency Decision Drills Dow Jones Industrial Average Futures

Dow Futures Dive 130 on China's Shocking Move

Aug 11, 2015 at 8:52 AM
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Just a day after exploding to the upside and snapping a long losing streak, the Dow Jones Industrial Average (DJIA) is poised to reverse lower, with futures sitting deep in the red. Weighing on the benchmark is a decision from the People's Bank of China to allow the yuan to depreciate against the dollar, which is overshadowing a breakthrough in Greek bailout negotiations. On the home front, traders will digest earnings from a number of notable names this morning -- including this solar stock -- as well as labor and trade data. Meanwhile, China's currency move is lifting gold and pressuring crude.

 

Continue reading for more on today's market, including:

 

  • Key levels that could define the market, courtesy of Schaeffer's Senior VP of Research Todd Salamone.
  • Not even yesterday's broad-market tailwinds could rescue Groupon Inc (NASDAQ:GRPN) from another two-year low.
  • In case you missed it, are these 25 stocks flashing a buy signal? Find out here.
  • Plus … 5 things you need to know this morning -- including stocks making waves, what's happening overseas, and the latest in unusual option activity.

And now, on to the numbers…

 

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Futures on the Dow Jones Industrial Average (DJIA) are roughly 130 points below fair value.

 

5 Things You Need to Know Today

 

  1. Stocks in China slipped, and European markets are getting burned, following Beijing's surprise currency move.
  2. The CBOE Volatility Index (VIX) fell nearly 9% yesterday, ending below its 10- and 20-day moving averages. Nonetheless, VIX call volume soared to triple the daily norm, as one trader rolled a ratio call spread down and out from the September 16 and 22 strikes to the October 15 and 21 strikes.
  3. Google Inc (NASDAQ:GOOGL) announced it will now be a subsidiary of a new parent company called Alphabet, with GOOGL shares scheduled to convert to Alphabet stock in the fourth quarter. GOOGL, which exploded higher last month after a well-received earnings report, is up nearly 6% pre-market.
  4. Yesterday's M&A momentum is continuing this morning, amid news that Norton antivirus parent Symantec Corporation (NASDAQ:SYMC) is selling its data storage unit to an investment group, and software firm Envestnet Inc (NYSE:ENV) has agreed to purchase data mining company Yodlee Inc (NASDAQ:YDLE).
  5. Twitter Inc (NYSE:TWTR) soared 9.1% yesterday to close at $29.50, helped by a number of catalysts, including news that interim CEO Jack Dorsey and other top executives bought thousands of the company's beaten-down shares. However, the stock is set to reverse course today, with TWTR down 1.8% ahead of the bell.

 

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Market Statistics

 

  • MannKind Corporation (NASDAQ:MNKD), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and Precision Castparts Corp. (NYSE:PCP) were among the equities with unusual call and put activity on Monday. For the entire list, read Unusual Options Activity: MNKD, TTWO, PCP, and DF.
  • The Chicago Board Options Exchange (CBOE) saw 706,076 call contracts traded on Monday, compared to 463,493 put contracts. The resultant single-session equity put/call ratio dropped to 0.66, while the 21-day moving average remained at 0.69.
  • For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for August 10, 2015.

 

Earnings and Economic Data

 

Nonfarm productivity, unit labor costs, and wholesale inventories will all be revealed this morning. Cyberark Software Ltd (CYBR), Cree, Inc. (CREE), JA Solar Holdings Co., Ltd. (ADR) (JASO), Fossil Group Inc (FOSL), Magic Software Enterprises Ltd. (MGIC), Myriad Genetics, Inc. (MYGN), Red Robin Gourmet Burgers, Inc. (RRGB), and Symantec Corporation (SYMC) will take their turns in the earnings spotlight. To see what else is on this week's docket, click here.

 

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