Dow Jones Industrial Average Futures Target All-Time Highs After Italy's Referendum

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Dec 5, 2016 at 9:11 AM
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Dow Jones Industrial Average (DJIA) futures are signaling yet another all-time high, as stocks shake off Italy's constitutional referendum vote and the subsequent resignation of Italian Prime Minister Matteo Renzi. Traders are also digesting a speech from New York Fed President William Dudley, who spoke in favor of a gradual rate hike, and keeping an eye on oil prices, with January-dated crude futures up 1% at $52.20 per barrel.

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

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Futures on the Dow Jones Industrial Average (DJIA) are about 72.6 points above fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 763,577 call contracts traded on Friday, compared to 512,573 put contracts. The resultant single-session equity put/call ratio rose to 0.67, while the 21-day moving average dropped to 0.62.
  2. Gold names are trending lower this morning, including the SPDR Gold Trust (ETF) (NYSE:GLD), which is set to drop 0.9% at the open, continuing its post-U.S. election struggle. February-dated futures are down 0.9%, after Italy's vote against a constitutional change bolstered the U.S. dollar against the euro. 
  3. Chesapeake Energy Corporation (NYSE:CHK) is ready to pop 4.4% at the open, after announcing the sale of portion of its Haynesville shale stake for $450 million. Even before today's jump, CHK sat up more than 380% from its February lows, recently boosted by last week's Organization of the Petroleum Exporting Countries (OPEC) agreement.
  4. Bank of America Corp (NYSE:BAC) is up 0.8% in electronic trading, after Baird raised BAC's price target to $22 from $18. The financial stock has been hot in the option pits recently, and has tacked on roughly 25% since the U.S. election results.
  5. The week kicks off with speeches from Chicago Fed President Charles Evans and St. Louis Fed President James Bullard. On the data front, the Institute for Supply Management's (ISM) non-manufacturing index will be released shortly after the open. GW Pharmaceuticals (GWPH) will report earnings. 

Buzz Stocks Dec 5

Overseas Trading

Stocks in Asia reacted to the failed referendum in Italy, which sent the euro tumbling amid political uncertainty. Hardest hit was China's Shanghai Composite, down 1.2%, despite the launch of the highly anticipated Shenzhen-Hong Hong stock connect. China is also in the headlines after U.S. President-elect Donald Trump accused Beijing of currency manipulation, just days after he took a congratulatory call from Taiwanese President Tsai Ing-wen -- representing a break from longstanding U.S. foreign policy. Things were no better for indexes outside of the mainland, as Japan's Nikkei dropped 0.8%, Hong Kong's Hang Seng slid 0.3%, and South Korea's Kospi surrendered 0.4%.

After earlier losses on the Italian referendum, European markets have roared back. Banking stocks, in particular, have recovered powerfully, helping London's FTSE 100 to a 0.3% gain -- with the index further bolstered by a better-than-expected IHS Markit/CIPS purchasing managers index, which hit a 10-month high. Rounding things out, the French CAC 40 and German DAX have jumped 0.8% and 1.5%, respectively.

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