Sliding Crude Weighs on Dow Jones Industrial Average Futures

2 Booming Biotechs Offering Options Bargains

Mar 9, 2017 at 9:05 AM
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Dow Jones Industrial Average (DJIA) futures are just below fair value, suggesting the index could be on track for a fourth consecutive day in the red. Weighing on stocks this morning is a further drop in oil prices, with crude futures for April down 1.8% to $49.36 per barrel -- on track for the lowest close since late November -- following a much larger-than-expected rise in U.S. inventories, with domestic stockpiles of 528.4 million barrels representing a record high. On the economic front, weekly jobless claims came in slightly higher than predicted, while import prices rose for a third straight month in February. Traders are also digesting the European Central Bank's (ECB) decision to leave interest rates unchanged, with ECB President Mario Draghi currently in the midst of a press conference.

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

  • 2 booming biotech stocks with bargain-basement options. 
  • Options traders bet on big post-Fed meeting moves for the iShares iBoxx $ High Yield Corporate Bond ETF (HYG).
  • The M&A buzz that sent this drug stock soaring.
  • Plus, e.l.f. Beauty takes off after earnings, Sears beats expectations, and AIG's CEO hands in notice. 

Dow Futures March 9

Futures on the Dow Jones Industrial Average (DJIA) are 7.7 points below fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 868,836 call contracts traded on Wednesday, compared to 539,360 put contracts. The resultant single-session equity put/call ratio rose to 0.62, while the 21-day moving average inched down to 0.62.
  2. Cosmetics company e.l.f. Beauty Inc (NYSE:ELF) reported quarterly earnings for the second time since the stock began trading publicly last September, and for the second time beat top- and bottom-line expectations. The news has so far earned ELF two price-target hikes from analysts, and has the shares up 21.3% pre-market, on pace for their highest open since mid-December. A short squeeze could add to the stock's gains, too, as over 78% of ELF's total float is currently shorted.
  3. Retailer Sears Holdings Corp (NASDAQ:SHLD) could also be set to burn an overwhelming crowd of short sellers, with the shares up 5.6% ahead of the bell. The company reported an adjusted per-share loss of $1.28 for the fourth quarter -- much narrower than analysts' predictions of a $2.85 per-share deficit -- and noted the completion of its sale of the Craftsman brand to Stanley Black & Decker, Inc. (NYSE:SWK). 
  4. Shares of American International Group Inc (NYSE:AIG) are up 1.4% ahead of the open, following news CEO Peter Hancock has handed in his resignation. Hancock said, "Without wholehearted shareholder support for my continued leadership, a protracted period of uncertainty could undermine the progress we have made and damage the interests of our policyholders, employees, regulators, debtholders, and shareholders," noting he will remain in his position until a successor is found.
  5. The economic calendar will be fairly quiet for the rest of the day. Among the companies set to take theirs in the earnings spotlight are El Pollo Loco (LOCO), Finisar (FNSE), FuelCell Energy (FCEL), Ocular Therapeutix (OCUL), Signet Jewelers (SIG), Stratasys (SSYS), VeriFone Systems (PAY), and Zumiez (ZUMZ).

Buzz Stocks March 9

Overseas Trading

Asian markets settled mostly lower, as stocks reacted to mixed data out of China. Specifically, China's producer price index (PPI) jumped 7.8% to its highest level in eight years, while consumer prices slowed by a sharper-than-expected margin to their most sluggish pace since early 2015. China's Shanghai Composite and Hong Kong's Hang Seng reacted negatively, dropping 0.7% and 1.2%, respectively, as did South Korea's Kospi, losing 0.2%. Bucking the trend lower was Japan's Nikkei, which tacked on 0.3% and snapped a string of four consecutive declines, buoyed by a relatively weaker yen.

Across the pond, the ECB decided against changing interest rates, as expected, adding that additional stimulus is a possibility if the eurozone's economic outlook weakens. All eyes are now on ECB President Mario Draghi's press conference. Markets are reacting negatively to these developments, with losses exacerbated by energy stocks amid an accelerating drop in oil prices. Looking to the indexes, London's FTSE 100 has shed 0.8%, set for its sixth straight loss. Elsewhere, the French CAC 40 is down 0.3%, and Germany's DAX has retreated 0.2%.

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