Options Trading News

October 30, 2013  Wed 7:04 AM CT


Stocks are climbing again today as investors hope for more easy money from the United States Federal Reserve.

S&P 500 futures rose almost three-tenths of a percent, while the Nasdaq-100 is indicated higher by more than four-tenths of a percent. Most European markets are up by at least half a percent and Asia was solidly green in the overnight session, with Hong Kong rallying 2 percent, Shanghai advancing 1.5 percent and Tokyo climbing 1.2 percent. Commodities and currencies are also painting a bullish picture.

The Fed will issue its monetary-policy announcement at 2 p.m. ET. Last month it surprised investors by not reducing monetary stimulus, and since then expectations have increased that so-called quantitative easing will be left in place. Interest rates, which have been falling since early September, are continuing their decline today.

The S&P 500 has been pushing into new record territory since mid-October after escaping from a five-month bullish-triangle consolidation pattern. The breakout has seen a shift in price performance toward stocks that benefit from lower interest rates: Fannie Mae and Freddie Mac, financial guarantors, home builders and loan servicers. Mutual-fund companies and precious metals have also outperformed, according to our researchLAB market scanner.

Consumer staples have led on a sector basis in the last two weeks after lagging during the previous half year.

Today's other big event comes at 8:15 a.m., when ADP releases its private-sector payroll survey for October. The report could have a big impact on sentiment because it will provide the first view of the labor market since the government shutdown started earlier this month.

In other news, economic sentiment in the Euro Zone rose more than forecast thanks to better conditions in the industrial and consumer sectors. There were other positive headlines from Spain, Portugal and Austria.

Copper, the euro and Australian dollar, are all rising, which reflects confidence in the global economy and expectations of a dovish Fed statement today. Gold and silver are climbing as well, along with most agricultural foodstuffs. Oil is mixed but bullish for refinery stocks, with Brent crude rising and West Texas Intermediate down. The Japanese yen is lower across the board, which also supports risk appetite.

In company-specific news, General Motors is up about 3 percent after reporting better-than-expected quarterly results. LinkedIn fell after issuing weak guidance despite strong profit. This afternoon's big names for earnings include Facebook and Visa.

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