Dow Jones Industrial Average Futures Rise as Election, Fed Take Focus

The 2 Big Events On Valeant Traders' Radar

Josh Selway
Oct 31, 2016 at 9:11 AM
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Dow Jones Industrial Average (DJIA) futures are trading above fair value this morning, as traders prepare for a busy week ahead of next Tuesday's U.S. presidential election. With Friday's "October surprise" involving Hillary Clinton's emails still fresh on the mind, Wall Street is also bracing for this week's Federal Open Market Committee (FOMC) meeting, though the central bank is widely expected to keep interest rates unchanged until December. As for today, stocks could take their cues from the latest round of economic data -- such as this morning's consumer spending numbers, which rose by more than expected in September -- not to mention another heavy dose of corporate earnings reports and a handful of M&A announcements.

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

U.S. stock futures October 31

Futures on the Dow Jones Industrial Average (DJIA) are almost 25 points above fair value. 

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 886,789 call contracts traded on Friday, compared to 689,802 put contracts. The resultant single-session equity put/call ratio jumped to 0.78, while the 21-day moving average remained at 0.64.
  2. Dow stock Nike Inc (NYSE:NKE) is among the pre-market losers this morning, dropping more than 1.5% in electronic trading. Pressuring the shares is a downgrade to "underperform" at BofA-Merrill Lynch, which also dropped its price target to $46 from $56. It's been a tough year for NKE, as the stock is down almost 17% year-to-date. 
  3. Meanwhile, Level 3 Communications, Inc. (NYSE:LVLT) is set to open 4.9% higher, after CenturyLink Inc (NYSE:CTL) agreed to buy the firm for about $24 billion. LVLT spiked amid M&A rumors late last week, and hit an eight-year high in July as buyout buzz swirled
  4. Oilfield services provider Baker Hughes Incorporated (NYSE:BHI) is looking at a 10.7% jump this morning -- set to continue Friday's rally -- after it was confirmed the company and General Electric Company's (NYSE:GE) will merger their oil-and-gas businesses. The new unit will be controlled by GE, while BHI shareholders will receive a one-time cash dividend of $17.50. 
  5. The Chicago purchasing managers index (PMI) and the Dallas Fed manufacturing survey come out today, as well. For the earnings slate, Cardinal Health (CAH), Lumber Liquidators (LL), and Southern (SO) are among those reporting. 

Buzz Stocks Oct 31

Overseas Trading

Stocks in Asia finished lower, with fresh concerns over the U.S. presidential election and lower crude oil prices weighing on markets. Traders also digested a mostly disappointing round of economic data out of Japan, including a seventh straight monthly decline in retail spending, as the country's central bank kicked off a two-day policy meeting. Japan's Nikkei, Hong Kong's Hang Seng, and China's Shanghai Composite each shed 0.1% for the day. South Korea's Kospi dropped 0.6%, following a weekend of protests in Seoul calling for President Park Geun-hye's resignation over the sharing of classified information. Meanwhile, a nearly 25% pop for troubled Hanjin Shipping failed to boost stocks in the region, with a stronger won pressuring exporters.

Traders in Europe are also parsing the latest developments in the reopening of an FBI probe into Hillary Clinton's email use. Meanwhile, oil prices are slipping after talks in Vienna over the weekend failed to yield a consensus as to whether non-Organization of the Petroleum Exporting Countries (OPEC) members will join in a global production-cut agreement. European markets are in the red at midday, with steady gross domestic product (GDP) growth and a slight uptick in inflation figures for the eurozone failing to give stocks a lift. Germany's DAX is off 0.3% after the country reported its sharpest decline in monthly retail sales in more than two years. London's FTSE 100 has slipped 0.4%, and France's CAC 40 is down 0.7%.

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