Dow Jones Industrial Average Futures Sink on Pre-Fed Jitters

How Fed Minutes Move the S&P

Aug 19, 2015 at 8:58 AM
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Futures on the Dow Jones Industrial Average (DJIA) are tumbling, as anxiety sets in ahead of this afternoon's release of the minutes from the latest Federal Open Market Committee (FOMC) meeting. Traders will be going over the minutes with a fine-toothed comb, looking for any hints as to whether a September rate hike is in the cards. Additionally, investors will be keeping a close eye on the volatile market action in China, amid speculation the global uncertainty could impact the timing of the Fed's interest rate lift-off.

 

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 61 points below fair value.

 

5 Things You Need to Know Today

 

  1. Bargain hunters helped boost the Shanghai Composite to a win, while European markets aren't responding well to Germany's Greek bailout vote.
  2. Ahead of today's options expiration, the CBOE Volatility Index (VIX) popped 5.9% Tuesday, but ran out of steam near the 14 mark -- home to its 40-day moving average. Looking ahead to the September series, peak call open interest of 294,780 contracts is located at the 20 strike, while peak put open interest of 162,033 contracts resides at the 14 strike.
  3. Following last week's shocking move by the People's Bank of China (PBOC), both Vietnam and Kazakhstan devalued their currencies. The dong dropped 1.2% today -- widening its month-to-date deficit to 2.4% -- while the tenge fell 4.4%, its largest one-day decline since February 2014.
  4. Unlike its sector peer Home Depot Inc (NYSE:HD), Lowe's Companies, Inc. (NYSE:LOW) is pointed south following the firm's turn in the earnings confessional. While LOW beat on the top line, it fell short on the bottom line. Ahead of the bell, the stock is down 1.3% -- a much more modest move than what options traders were pricing in.
  5. It's been a big week on the M&A front -- with news from both the retail and the financial sectors snagging the Street's attention. Today, data storage specialist Seagate Technology PLC (NASDAQ:STX) said it will purchase Dot Hill Systems Corp. (NASDAQ:HILL) in an all-cash deal valued at roughly $694 million, or $9.75 per share. After closing last night at $5.18, shares of HILL are up 87.3% in electronic trading. STX, meanwhile, has edged up 0.9%.

 

150819OV_Buzz

 

Market Statistics

 

  • Target Corporation (NYSE:TGT), Omeros Corporation (NASDAQ:OMER), and LOW were among the equities with unusual call and put activity on Tuesday. For the entire list, read Unusual Options Activity: AEO, TGT, LOW, LEN, and OMER.
  • The Chicago Board Options Exchange (CBOE) saw 576,344 call contracts traded on Tuesday -- the fewest in a full session since July 3, 2013 -- compared to 378,749 put contracts. The resultant single-session equity put/call ratio fell to 0.66, while the 21-day moving average remained at 0.72.
  • For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for August 18, 2015.

 

Earnings and Economic Data

 

The consumer price index (CPI) and core CPI, as well as the weekly crude inventories report are slated for release today. Most notably, though, the FOMC will release the minutes from its July meeting.  Additionally, retail earnings continue to roll in, with American Eagle (AEO), L Brands (LB), LOW, Staples (SPLS), and Target (TGT) set to report. Other companies reporting include Youku Tudou (YOKU), Eaton Vance (EV), Hormel Foods (HRL), ARC Group (ARCW), Momo (MOMO), NetApp (NTAP), Popeyes Louisiana Kitchen (PLKI),  and Synopsis (SNPS). Caterpillar (CAT), meanwhile, will hold a teleconference with investors and analysts. To see what else is on this week's docket, click here.

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