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| Red Option
7/22/2013
U.S. equity futures are trading slightly higher to begin the week ahead of the opening bell. This week more than 130 of the S&P 500 companies are scheduled to report second quarter earnings as the peak portion of earnings season approaches. Overseas markets were choppy despite a pledge from the Group of 20 nations to prioritize growth ahead of austerity in order to revive the global economy.
The CBOE Volatility Index (VIX) fell 9% on Friday and continues to grind down towards yearly lows. Option protection is cheap as investors are shunning buying anything. Individual stocks are showing increased volatility into earnings but major index and ETF premiums are extremely low. Treasuries are little changed to slightly higher with the 10-year note yield at 2.475%. A rally in Japanese Bonds on the back of PM Abe's election victory helped gains. European equities are little changed. In the U.S. today, the only items of note are the June existing home sales report so focus will likely be on corporate results. Earnings announcements include McDonald's (MCD), Texas Instruments (TXN), and Netflix (NFLX).
Stock Stories:
Halliburton (HAL) – slick beat – Oil services leader posts better than expected quarterly results this morning as it beats on the top and bottom lines. The Board also increased it share repurchase authorization to $5 B. Shares are up almost 2% ahead of the opening bell.
Kimberly Clark (KMB) – Mixed bag – Consumer products giant beats EPS estimates but misses on Revenue. The company’s shares are down slightly in the pre-market.
Major Economic Reports:
7:30 am CT – Chicago Fed National Activity Index
9:00 am CT– Existing Home Sales
Notable Earnings:
Before Market: HAL, HAS, KMB, MCD, PETS
After Market: CNI, NFLX, STM, TXN
Tuesday – 7/23: AAPL, AMTD, BRCM, DD, DFS, LMT, MO, NSC, T, TRV, UPS, UTX, VLO
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