Options Trading News

July 22, 2013  Mon 7:14 AM CT

Equities are slightly higher today after another record close on Friday.

S&P 500 futures are up almost one-quarter of a percent after gaining in the last hour. Most European markets are hovering in a range, though Asian bourses gained more than half a percent in the overnight session. Energy, precious metals, and copper are also strong, while bond yields are falling.

Investors are preparing for a week with relatively little economic data but plenty of corporate results. Two of the main themes so far this earnings season have been improved profitability at financial firms and more optimistic outlooks from industrials. Big-cap tech names such as Microsoft, Google, and Intel, however, have disappointed.

Interest rates have been declining after a hair-raising spike in May and June, helping support sentiment. Commodities and metals have also shown signs of bottoming in the last week, which reflects increased confidence toward the global economy.

The S&P 500 has closed at peak levels in six of the last eight sessions. The Russell 2000 small-cap index has been even stronger and now stands more than 4 percent above its May highs. Gains have also been widely distributed across the market on a sector basis, with no major areas showing clean dominance over the other.

Our researchLAB market scanner has shown money flowing into Chinese equities over the last week, especially online gaming companies, Internet stocks, and solar-energy companies. Staffing companies have also rallied on an improved employment situation, ocean shippers have benefited from a sharp rise in the Baltic Dry Index of cargo rates, and telecom suppliers have gained on hopes of more capital spending later this year. In addition, gold and silver miners have outperformed as investors look for those stocks to rebound from massive long-term selloffs.

Physical gold and silver bullion are up about 2 percent this morning. Copper, viewed as a bellwether for the global economy, rose almost 1 percent. Oil is posting smaller gains and agricultural products are mixed. The euro, Australian dollar and Canadian dollar, which tend to follow global economic sentiment, rose. The Japanese yen is also showing some strength, which tends to reflect caution.

In company-specific news, oil-services giant Halliburton rose almost 2 percent after earnings and revenue beat expectations. Management also cited improving demand in the Middle East and China and increased its stock buyback plan. Hasbro missed expectations, following similarly weak results in toymakers such as Mattel and Jakks Pacific as children shift to electronic devices. McDonald's fell after its earnings missed expectations. 
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