China, Wal-Mart Send Dow Jones Industrial Average Futures Tumbling

Why Small-Caps Present Such a Big Risk

by Karee Venema

Published on Aug 18, 2015 at 8:56 AM
Updated on Jun 24, 2020 at 10:16 AM

The Dow Jones Industrial Average (DJIA) is on pace to erase most of yesterday's hard-won gains, as traders digest a mixed round of blue-chip earnings and another currency-related drop for China's Shanghai Composite. Specifically, Wal-Mart Stores, Inc. (NYSE:WMT) and Home Depot Inc (NYSE:HD) are headed in different directions after earnings, with WMT pointed 2.6% lower in electronic trading, and HD up 1.3%. Meanwhile, Wall Street will also chew on a strong reading on housing starts -- which rose to a pre-recession high in July.

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

 

And now, on to the numbers…

 

150818ovfutures

Futures on the Dow Jones Industrial Average (DJIA) are more than 60 points below fair value.

 

5 Things You Need to Know Today

 

  1. Stocks in China sold off as the yuan took a fresh tumble, while traders in Europe are taking a cautious approach ahead of tomorrow's big bailout vote.
  2. The CBOE Volatility Index (VIX) settled at 13.02 on Monday -- right near the middle of its recent range. VIX calls crossed at 1.7 times the average daily rate, and outpaced puts by a nearly 3-to-1 margin. With front-month VIX expiration tomorrow, traders honed in on a number of September-dated options -- including the 20-strike call, where 148,629 contracts changed hands.
  3. Following yesterday's big M&A news in the retail sector, financial firm BB&T Corporation (NYSE:BBT) said last night it is buying Pennsylvania-based National Penn Bancshares (NASDAQ:NPBC) for $1.8 billion in cash and stock, or $13 per share. BBT is down 2.7% in electronic trading, while NPBC has popped 14%.
  4. With crude prices panning six-year lows, the Bureau of Safety and Environmental Enforcement approved Royal Dutch Shell plc's (ADR) (NYSE:RDS.A) request to drill for oil off Alaska's northwest coast. This is the first time a company has been granted permission to drill in that area since 1991.
  5. Esperion Therapeutics Inc (NASDAQ:ESPR) is eyeing an 11% jump out of the gate after the Food and Drug Administration (FDA) said it does not need an extra heart risk trial for its lead drug, ETC-1002. If approved, this could add to the highly competitive cholesterol-lowering drug market.

 

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Market Statistics

 

  • Twitter Inc (NYSE:TWTR), Sprint Corp (NYSE:S), and Urban Outfitters, Inc. (NASDAQ:URBN) were among the equities with unusual call and put activity on Monday. For the entire list, read Unusual Options Activity: TWTR, S, MBLY, and URBN.
  • The Chicago Board Options Exchange (CBOE) saw 850,654 call contracts traded on Monday, compared to 590,599 put contracts. The resultant single-session equity put/call ratio rose to 0.69, while the 21-day moving average edged up to 0.62.
  • For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for August 17, 2015.

Earnings and Economic Data

 

Housing starts and building permits for July are on the docket for today. In addition to HD and WMT, earnings are also due out from Canadian Solar (CSIQ), Trina Solar (TSL), Analog Devices (ADI), Cheetah Mobile (CMCM), Dick's Sporting Goods (DKS), Hain Celestial (HAIN), La-Z-Boy (LZB), TJX (TJX), SINA (SINA), and Weibo (WB). To see what else is on this week's calendar, click here.

 

 

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