After climbing decisively back to the middle of its familiar range, the S&P 500 has spent most of the last few days drifting lower as the bulls have grown weary. Appetite for risk and overall sentiment remains strong, however, and at the outset of a seasonally bullish time, one can’t help but wonder if this is merely a brief timeout prior to a run up to all-time highs. The Nasdaq remains the strongest of the major indexes despite a stumble by Apple spurred by analyst concerns that IPhone sales may be softening.
The CBOE Volatility Index (VIX) has snuck above 16 with the quiet low key optimism in play. The odds are about 2 to 1 in favor of an interest rate increase at the FOMC December meeting, which remains the greatest potential governor on a possible market acceleration. Jobs, retail sales, and inflation will be watched closely in the meantime. Janet Yellen will make some opening remarks at a Fed Conference this morning, but it is not expected to make a huge impact on the markets. Her words will be parsed closely regardless. Options traders are ready to go no matter what. To learn more: http://www.optionsuniversity.com/academy
OVERSEAS: Asian markets were mixed and flat with the notable exception of Hong Kong, which surged over 2%. Despite concerns about a Chinese economic slowdown, the Hong Kong market is clearly in a bull market coming off of its recent lows. In Europe, the sell-off was broad and decidedly down as they await possible additional action from Draghi, the head of the European Central Bank.
OIL: Crude oil prices have ticked down to the low $40’s per barrel over the last week, reaching a two-month low. Inventories remain quite high relative to demand. A new report is due out this morning on crude stockpile status which could impact prices today.
JOBS: The jobless claims number from last week disappointed at 276K claims (up 16K from the prior week). Analysts expected that number to come down this week by roughly 10K to 266K. The actual new number was likewise worse than expected as it came in again at 276K. Additional information on job openings will be out later today (the ‘JOLTS’ report), which will cast additional light on the current labor market.
BIOTECH INSIDER: Years ago, the World Health Organization estimated that hepatitis C affected up to 170 million people around the globe. Despite the news, and warnings the disease could lead to death, cirrhosis and cancer, there was still a growing unmet medical need for drugs. Shortly after, the U.S. Centers for Disease Control urged 80 million baby boomers to be tested. While about a third of patients have been found to rid themselves of the virus within six months without treatment, millions more suffer a lack of treatment options. But over the last several years, new costly drugs have emerged to reduce the suffering of millions. That’s part of the reason companies like Gilead are up more than 450%. Investors are still watching Achillion Pharmaceuticals as well, as Johnson & Johnson use its hepatitis C drug in drug combo testing. Results of such tests are due in the first quarter of 2016. To learn more about the potential of such stocks, click here: http://optionswealthinsiders.com/biotechv2/
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