US Market Update: Quad Witching Boosts Trading Volumes



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Article content US Market Update: Quad Witching Boosts Trading Volumes

20.06.2014 17:38 Friday
***Economic Data***
- (EU) ECB: 12 banks to repay total €12.6B in 3-Year LTRO Funds vs. €5.0Be
- (IN) India Forex Reserves w/e Jun: No est v $312.6B prior
- (RU) Russia May Unemployment Rate: 4.9% v 5.2%e
- (RU) Russia May Real Retail Sales M/M: 1.7% v 2.2%e; Y/Y: 2.1% v 2.7%e
- (RU) Russia May Real Disposable Income: 5.8% v 1.7%e
- (RU) Russia May Real Wages Y/Y: 5.0% v 1.5%e
- (RU) Russia May Investment in Productive Capacity: -2.6% v -3.3%e
- (CA) Canada Apr Retail Sales M/M: 1.1% v 0.6%e; Retail Sales Ex Auto M/M: 0.70.4%e
- (CA) Canada May CPI M/M: 0.5% v 0.3%e; Y/Y: 2.32.0%e; Consumer Price Index: 125.8 v 125.7e
- (CA) Canada May CPI Core M/M: 0.5% v 0.3%e; Y/Y: 1.7% v 1.5%e
- (CA) Canada May CPI (Seasonally Adj) M/M: 0.2% v 0.1%e; CPI Core SA M/M: 0.2%e v 0.2% prior
- (MX) Mexico Apr Retail Sales Y/Y: -0.4% v -1.3%e
- (EU) Euro Zone Jun Advance Consumer Confidence: -7.4 v -6.5e

- The S&P500 closed yesterday at fresh all-time highs and headed even higher in the first 45 minutes of trading. Note that the DJIA is also seeing fresh all-time highs this morning. Note that today is quadruple witching and overall trading volumes are up as a result.

- Just a day after NATO Chief Rasmussen warned that Russia was boosting troop levels on Ukraine's borders, there are fresh reports that Russia is sending tanks, armored vehicles and artillery over the border to resupply pro-Russia insurgents. The US State Department confirmed that it is looking at a fresh round of sanctions against Russia as Moscow continues to send more materiel to Ukraine. In Iraq, government forces are massing north of Bagdad, with up to 50K troops preparing an offensive against ISIS, while fighting continues around the Baiji refinery. WTI crude is trading slightly higher, above $107.

- AK Steel and Nucor have both offered weak second-quarter guidance. Nucor's earnings are still in positive territory although will be much less than expected, while AK Steel warned it would see a quarterly loss, versus expectations for a slight profit. AK blamed lingering effects of the winter weather and hedging losses, Nucor said its lower view was due to losses at its new Louisiana DRI iron plant. Nucor also stated that imports continue to negatively impact pricing and margins. The two names lost more than 2.5% in the premarket and are down 1.5% as of writing.

- Darden Restaurants reported fourth-quarter results and updated on its sale of Red Lobster. Darden expects to receive net proceeds from the sale of $1.6 billion, of which approximately $1.0 billion will be used to retire outstanding debt and the balance to go to share buybacks. The deal will close this quarter. The firm provided post-spinoff guidance for FY15, and while it was well below consensus it was not comparable to the expectations. Shares of DRI are down 3.5%.

- Shares of Oracle are sinking even lower this morning, down 6% as of writing, after the firm's poor fourth-quarter performance. Multiple names have cut ratings on the tech company, with many citing the weak performance of the firm's SaaS initiatives as a very bad sign for the future. Bank of America is a contrarian, saying the declines are a great buying opportunity.

***Looking Ahead***
- (ES) Spain Sovereign Debt Rating May Be Published by Moody's
- (NO) Norway Sovereign Debt Rating May Be Published by Moody's
- (CO) Colombia Central Bank Interest Rate Decision: Expected to raise Overnight Lending by 25bps to 4.00%
- (MX) Mexico Banamex Survey of Economists
- 12:00 (FR) France Industry Min Montebourg press conference on Alstom
- 13:00 (AR) Argentina President Fernandez to give national address