Economic Data, Mnuchin Tax Teaser Boosting Dow

Tame inflation data is dampening expectations for a December rate hike

Managing Editor
Aug 31, 2017 at 12:00 PM
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The Dow Jones Industrial Average (DJIA) is higher at midday, boosted by the latest economic data. Weekly jobless claims remained low, while consumer spending increased by 0.3% in July, even as annual inflation increased at its slowest rate since 2015 -- dampening expectations for a December rate hike from the Fed. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) are also higher at midday, with the former pacing for a fifth straight daily win. It won't be enough, however, for the S&P 500 to avoid its first monthly loss since March. The CBOE Volatility Index (VIX) -- Wall Street's "fear gauge" -- is dropping, set for its lowest close in three weeks. 

Elsewhere, Treasury Secretary Steven Mnuchin teased a "very detailed" tax plan, which he expects to be passed this year. Traders also continue to monitor Tropical Storm Harvey, as refineries remain closed amid the flooding. Front-month gasoline futures are trading at two-year highs above $2 per gallon, while October-dated crude oil futures are rebounding, up 2.5% at $47.13 per barrel, though oil is still on pace for a steep monthly loss.

Continue reading for more on today's market -- and don't miss:

  • Why bank bulls may want to take cover.
  • Goldman: Expect record highs for these 2 stocks.
  • Plus, Ciena's spiking put volume; AMD stock rallies; and one of the worst stocks to own next week.

Midday Market Stats Aug 31

Among the stocks with unusual options volume is tech name Ciena Corporation (NYSE:CIEN), with over 14,000 puts traded -- 12 times the average intraday pace, and on track for the highest percentile in its annual range. The weekly 9/1 23.50-strike put has attracted notable attention, with over 3,700 contracts traded. Ciena stock is currently down 10.2% to trade at $21.78, after the firm offered lackluster current-quarter guidance. CIEN stock has shed 11% year-to-date and is currently short-sale restricted.

Advanced Micro Devices, Inc. (NASDAQ:AMD) is up 2.5% at $12.99, near the top of the S&P 500, though the catalyst is unclear. The chip stock, which has added 76% year-over-year, had pulled back after its annual high of $15.65 on July 26, but bounced off its 200-day moving average.

Midday Market Chart AMD Aug 31

Campbell Soup Company (NYSE:CPB) is among the worst stocks on the S&P 500 today, down 6.5% to trade at $46.99. The stock earlier today touched an annual low of $46.95, after the company reported earnings that fell below Wall Street estimates, and predicted "significantly weaker performance" in the first half of 2018. CPB stock has shed 22% year-to-date, and is among one of the worst stocks to own during Labor Day week, historically.

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