Dow Jones Industrial Average Futures Modestly Higher Ahead of Yellen

The Options Strategy to Manage This Market's Risks

Feb 14, 2017 at 9:02 AM
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Dow Jones Industrial Average (DJIA) futures are signaling another day of gains for stocks, as Wall Street awaits Fed Chair Janet Yellen. Specifically, Yellen is scheduled to begin a two-day testimony before Congress shortly after the open, with a number of regional Fed presidents set to speak throughout the day, as well. Already, Richmond Fed President Jeffrey Lacker stepped up to the mic, opining that "significantly higher rates are warranted." On the data front, U.S. producer prices rose by more than expected last month, jumping by the biggest margin in four years. In corporate news, Dow stock Apple Inc. (NASDAQ:AAPL) is eyeing fresh highs, while healthcare giants Humana Inc (NYSE:HUM) and Aetna Inc (NYSE:AET) have officially called off their merger plans. 

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

  • 3 drug stocks that made huge moves. 
  • The options strategy to manage this market's risks, courtesy of Schaeffer's Senior VP of Research Todd Salamone. 
  • Technical resistance and "Frexit" fears are keeping this ETF in check ahead of France's upcoming election.
  • Plus, Humana and Aetna search for direction, T-Mobile beats, and Gilead's positive drug development.

US stock futures feb 14

Futures on the Dow Jones Industrial Average (DJIA) are nearly 26 points above fair value.

5 Things You Need to Know Today
  1. The Chicago Board Options Exchange (CBOE) saw 865,227 call contracts traded on Monday, compared to 523,520 put contracts. The resultant single-session equity put/call ratio dropped to 0.61, while the 21-day moving average edged down to 0.67.
  2. Health insurance stocks HUM and AET are both unchanged in electronic trading, after the companies announced they're ditching their merger efforts after a federal judge ruled against the companies last month. Humana is now owed a $1 billion breakup fee from Aetna. 
  3. Despite posting better-than-expected fourth-quarter earnings and revenue, shares of T-Mobile US Inc (NASDAQ:TMUS) are edging lower ahead of the open. The potential drop could be related to yesterday's news of an unlimited data plan from telecom rival Verizon Communications, Inc. (NYSE:VZ). Still, TMUS has been a top performer on Wall Street over the past year, adding 73.5%. 
  4. Gilead Sciences, Inc. (NASDAQ:GILD) is on the move yet again, just a day after rumors that activist investor Carl Icahn is interested in the company had the stock rallying. This morning, GILD is eyeing a 1.6% pop, thanks to promising mid-stage trial results from its experimental HIV drug. 
  5. Atlanta Fed President Dennis Lockhart and Dallas Fed President Robert Kaplan also have scheduled speeches today. American International Group (AIG), Dr Pepper Snapple (DPS), Express Scripts (ESRX), and Molson Coors (TAP) are among the other companies set to release earnings

Buzz stocks Feb 14

Overseas Trading

Markets in Asia finished the session mostly lower, as traders proceed with caution ahead of Yellen's testimony. Japan's Nikkei led the losses, shedding 1.1% after the country's finance minister, Tao Aso, noted that creating a framework for an economic dialogue with the U.S. could take some time. Also weighing on Tokyo shares was a strengthening yen and heavy losses from electronics giant Toshiba, which fell more than 8% on news the company delayed its earnings report. Elsewhere, South Korea's Kospi dropped 0.2% and Hong Kong's Hang Seng slipped 0.03%. In China, the Shanghai Composite managed to finish up 0.05%, after the country reported its largest rise in consumer prices in over two years, as well as its biggest jump in producer prices since 2011.

European stocks are little changed at midday, as investors parse a heavy round of corporate earnings and a downwardly revised fourth-quarter gross domestic product (GDP) for the eurozone. In the U.K., inflation for January rose at its fastest rate since June 2014, thanks to stronger oil prices and a weaker pound -- though the 1.8% uptick missed predictions. London's FTSE 100 was last seen a hair below breakeven, while Germany's DAX is off 0.04%, and France's CAC 40 is just 0.03% higher.

Stay on top of breaking stock market news with Schaeffer's Midday Market Check.


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