Beijing dismissed reports of an end to China's purchase of U.S. Treasury bonds
The U.S. stock rally appears ready to resume today, with futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) above fair value. The benchmarks logged their first loss of 2018 yesterday, on reports China was considering scaling back its U.S. bond purchases, though Beijing has since dismissed the speculation as "fake news."
While bank stocks appear ready for a positive session ahead of fourth-quarter earnings season -- with JPMorgan Chase (JPM) and Goldman Sachs (GS) each trading higher ahead of the bell -- traders will also be keeping a close eye on an afternoon speech from New York Fed President William Dudley, which follows this morning's key inflation update. Specifically, although the producer price index (PPI) unexpectedly slipped in December, it surged 2.6% in 2017 -- its biggest annual increase since 2011.
Continue reading for more on today's market, including:
- How options traders are reacting to an imploding VIX, according to founder and CEO Bernie Schaeffer.
- 2 copper stocks for call buyers to consider.
- Analyst: Deere stock can still rally another 20%.
- Plus, Delta eyes uncharted territory after earnings, Overwatch League kick-off has ATVI flirting with record highs, and another price-target hike for Amazon.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 966,939 call contracts traded on Wednesday, compared to 631,357 put contracts. The single-session equity put/call ratio rose to 0.65, while the 21-day moving average remained at 0.57.
- Delta Air Lines, Inc. (NYSE:DAL) said fourth-quarter profit came in at a better-than-expected 96 cents per share, while revenue also beat. The airline offered an upbeat current-quarter total unit revenue forecast, and raised its full-year profit guidance. In reaction, Delta stock is up 3.5% ahead of the bell, set to open at a record high.
- Shares of Activision Blizzard, Inc. (NASDAQ:ATVI) appear ready to break above long-term resistance near $67, after the video game maker's professional e-sports league, Overwatch, kicked off its inaugural season on Wednesday. At last check, ATVI was 2.5% higher in electronic trading -- and could hit an all-time peak out of the gate.
- Stifel joined a growing list of analysts this week that have been raising expectations for Amazon.com, Inc. (NASDAQ:AMZN). The brokerage firm hiked its AMZN price target to $1,425 from $1,313, citing optimism ahead of the e-commerce giant's fourth-quarter earnings report, due the evening of Wednesday, Jan. 31. Amazon stock is up 0.5% in pre-market trading, set to take out Tuesday's record high of $1,259.33.
- The Treasury budget, the Fed's balance sheet, and weekly jobless claims are due. While no quarterly reports are due, fourth-quarter earnings season starts tomorrow.
Strengthening Yen Weighs on Tokyo Stocks
There was mixed trading in Asia overnight, as traders reacted to a weakening U.S. dollar and reports that China may not be intending to end its U.S. debt purchases after all. Still, the Shanghai Composite and Hang Seng both closed higher yet again, bringing their respective daily win streaks to 10 and 13. The Shanghai Composite ended up 0.1%, while the Hang Seng added 0.2%. The Nikkei fell 0.3%, however, as a strengthening yen pressured exporters. The South Korean Kospi also suffered a pullback, shedding 0.5%.
Stocks in Europe are also struggling for upside today. The retail sector is suffering notable losses, led by a sharp decline in shares of jewelry giant Pandora. For economic data, industrial production out of the eurozone topped expectations in November, while a report out of Germany pointed to stronger-than-expected economic growth for the country. Still, the German DAX was last seen 0.1% lower. London's FTSE 100, meanwhile, is up 0.1%, as is the CAC 40 in France.