DJIA futures are signaling a higher open for stocks ahead of a busy earnings slate
Dow Jones Industrial Average (DJIA) futures are trading solidly above fair value this morning, signaling a strong start to the busiest earnings week of the quarter. Headlining today's earnings schedule is a post-close report from Dow component Visa Inc (NYSE:V), which will look to continue a mostly upbeat round of
blue-chip earnings. A flurry of M&A activity is bolstering sentiment, as a handful of deals -- led by AT&T Inc.'s (NYSE:T) planned buyout of Time Warner Inc (NYSE:TWX) -- sparks optimism about the collective corporate purse strings. Fed chatter is also likely to grip the market, with New York Fed President William Dudley, St. Louis Fed President James Bullard, Chicago Fed President Charles Evans, and Fed Governor Jerome Powell all set to speak throughout the day.
Continue reading for more on today's market, including:
Futures on the Dow Jones Industrial Average (DJIA) are 89 points above fair value.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1.2 million call contracts traded on Friday-- the most since January -- compared to 695,914 put contracts. The resultant single-session equity put/call ratio rose to 0.56, while the 21-day moving average slipped to 0.64.
- Both T and TWX are lower ahead of the open, after it was confirmed over the weekend that AT&T has reached an agreement to buy Time Warner for roughly $85 billion -- or $107.50 per share -- in a cash-and-stock deal. While T shares have trailed off in recent weeks and TWX has gained, both stocks are in the black on a year-to-date basis, and, interestingly, both saw short interest climb by nearly 11% during that past two reporting periods.
- As T makes moves on the M&A front, fellow telecom stock T-Mobile US Inc (NASDAQ:TMUS) is set to add to its 19.5% year-to-date gain this morning, thanks to impressive third-quarter results, driven by strong customer growth. The report comes just two months after the announcement of the company's unlimited data plan.
- Elsewhere, tech giant Facebook Inc (NASDAQ:FB) is on pace to open at a record high this morning. The stock is already up 26% in 2016, with earnings due out next week. In the meantime, one bold options trader will be paying close attention to the $133 level this week.
- The Markit purchasing managers manufacturing index (PMI) will also be released, while Sohu.com (SOHU) and VF Corp (VFC) join V on the earnings front.
Overseas Trading
Asian stocks settled higher ahead of a busy week of corporate earnings reports, as Japan posted a slimmer-than-expected decline in exports for September. In Tokyo, the Nikkei reversed early losses to notch a 0.3% gain, after the region's preliminary Markit manufacturing purchasing managers index (PMI) rose to 51.7 in October -- the biggest rise in nine months. Elsewhere, China's Shanghai Composite jumped 1.2% amid growing optimism that the government will unveil stimulus to support infrastructure programs, while Hong Kong's Hang Seng reopened in the wake of Friday's natural disaster to add 1%. Rounding things out, South Korea's Kospi tacked on 0.7%.
Stocks in Europe are in the green at midday, boosted by a 30-month high in Markit's PMI for the eurozone. Additionally, stocks are reacting to well-received political developments in Spain, where the Socialist Party ended a months-long gridlock by conceding victory to Popular Party prime minister incumbent Mariano Rajoy. Earnings are also in focus, with medical equipment maker Philips soaring in the wake of its results. At last check, the French CAC 40 and German DAX were both flirting with 0.9% leads, while London's FTSE 100 was up 0.1%.
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