Dow Jones Industrial Average Futures Point to Caution Ahead of Fed Minutes

Does the Low VIX Mean It's Time to Buy Options?

Aug 17, 2016 at 9:17 AM
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Dow Jones Industrial Average (DJIA) futures are sticking close to breakeven, as traders exercise caution ahead of the release of the latest Federal Open Market Committee (FOMC) meeting minutes, which could provide more clues about the timing of the Fed's next interest rate hike. In the same vein, Wall Street will tune in to St. Louis Fed President James Bullard's afternoon speech, particularly in the wake of recent hawkish comments from fellow central bankers. Earnings misses by big names such as Target Corporation (NYSE:TGT) and Lowe's Companies, Inc. (NYSE:LOW) are also keeping stocks at bay this morning, and Dow component Cisco Systems, Inc. (NASDAQ:CSCO) is making headlines ahead of its own turn in the earnings confessional tonight. Meanwhile, September-dated crude futures are down 0.4% at $46.40 per barrel, as oil prices slip ahead of today's crude inventories report. 

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

081716OV1

Futures on the Dow Jones Industrial Average (DJIA) are 6 points above fair value.

5 Things You Need to Know Today
 

  1. Japanese stocks ended higher, as the yen cooled and energy stocks outperformed.
  2. The Chicago Board Options Exchange (CBOE) saw 747,106 call contracts traded on Tuesday, compared to 522,222 put contracts. The resultant single-session equity put/call ratio rose to 0.70, while the 21-day moving average remained at 0.63.
  3. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is set to open with a 10.3% gain, following an upgrade to "overweight" from "equal weight" at Morgan Stanley, which also hiked VRX's price target to $42 from $33 -- territory not charted since March. In what is the latest round of bullish analyst attention for VRX, Morgan Stanley cited "a clearer vision" that will help "enhance financial prospects" under new CEO Joe Papa as one reason for its increased optimism towards the biotech.
  4. CSCO is in the headlines ahead of earnings tonight, after CRN reported that the tech giant will be laying off 14,000 employees -- nearly 20% of its global workforce -- as it increasingly shifts its focus from hardware to software. Ahead of the bell, CSCO is sticking close to breakeven at $31.12. 
  5. LOW is down 4.6% in pre-market trading, after its quarterly earnings missed analysts' expectations, and after the home improvement retailer lowered its full-year guidance. The anticipated drop should have quite a few recent option traders cheering, though. 

Buzz Stocks August 17

Earnings and Economic Data

Agilent (A), American Eagle Outfitters (AEO), Analog Devices (ADI), JA Solar (JASO), L Brands (LB), NetApp (NTAP), and Staples (SPLS) are among the firms due to release earnings results. To see what is coming up on this week's schedule, click here

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