U.S. equity futures are falling today in early trading. A weak factory report out of China pushed overseas markets lower and has put the U.S. futures in an early hole. Later today investors will examine the PMI Manufacturing Index, Weekly Jobless claims data, reports on housing prices and sales, the leading economic indicators, and the weekly energy inventories reports. Volatility continues to trade in a tight range at low levels. The CBOE Volatility Index (VIX) finished yesterday’s session relatively flat as stocks finished the day slightly higher. Hopefully the negative tone to stocks can jumpstart option volatility and increase premiums.
Treasuries are bouncing higher this morning as stocks have faded overnight. Overseas, markets were mostly lower as the report out of China is suggesting a contracting manufacturing sector. The Euro-zone business activity rose to a three-year high and services also beat expectations. We finally have some economic data to digest but markets may continue to stall as earnings have been mixed.
Stock Stories:
Ebay Inc. (EBAY) – Mixed – The online reseller and PayPal parent posted slightly better than expected quarterly results last night. The stock immediately rose 10% on a $5B share buyback and comments from investor Carl Icahn. The company guided lower for the upcoming year and after digging through the report many saw warning signs. The shares have retreated but are still up 1% ahead of the opening bell.
Netflix (NFLX) – Surprise! – The online streaming company beats soundly on EPS and reports higher than expected Revenue. The option market was predicting a 10% move in the shares into the quarterly results but the stock in sharply higher by 17% in the premarket. The stock has a small float of shares so the rally could be a result of a short squeeze.
