Options Trading News

September 30, 2013  Mon 7:12 AM CT

Stocks are falling today as the United States heads towards a government shutdown. Negative headlines have also emerged from Italy and China.

S&P 500 futures are down about two-thirds of a percent, while Germany and France are falling by more than a full percentage point. Asia mostly declined in the overnight session, led by a 2 percent drop in Tokyo and a 1.5 percent loss in Hong Kong. The safe-haven Japanese yen is rallying, while economically sensitive commodities like oil and copper are down.

House Republicans have refused to pass a budget for the fiscal year starting tomorrow unless the White House's health-care overhaul known as Obamacare is delayed. Battle lines hardened over the weekend, making a shutdown this week almost inevitable. In addition, a likely fight over raising the nation's debt ceiling looms in mid-October. Given the timeframe, the situation has the potential to get worse before it gets better.

In addition, five Italian ministers allied with Silvio Berlusconi resigned from the government of Enrico Letta, presenting the risk of political crisis in one of the world's most heavy indebted countries. Chinese manufacturing data also missed expectations in the overnight session, the first time in several months that economic numbers from the country have disappointed.

A mood of uncertainty was spreading even before these developments, highlighted by the Federal Reserve's surprise failure to slow bond purchases on Sept. 18. That move drove the S&P 500 to a record high, but the index has fallen steadily since.

Bonds have also been gaining since the Fed's announcement, reversing a four-month selloff prompted by signs of an improving economy. That trend of fixed-income strength, with yields falling, is continuing.

The S&P 500 may try to bounce because it's indicated to open near the 1670 level where it formed peaks in May and August. Guy Adami has also identified this price range as support. (View our daily Market Action webinars for more insights from traders such as Adami, Jon Najarian and Pete Najarian.)

Currencies are following the bearish trend today, with the euro falling and the Japanese yen gaining across the board. Commodities paint a similar picture, with oil down about 1 percent. Copper and precious metals are also lower and agricultural products are mixed.

This week features a busy agenda of economic items, including European and United States manufacturing data tomorrow and non-farm payrolls on Friday. Today's only release is the Chicago Purchasing Managers index at 9:45 a.m. ET. (See our calendar rundown)

In company-specific news, Achillion Pharmaceuticals is indicated to open down by more than 50 percent after the Food and Drug Administration refused to approve the company's experimental hepatitis C drug because of liver complications.
Share this article with your friends

Related Stories


Rally continues, lifted by commodities

October 9, 2015

S&P 500 futures are up 0.2 percent, while most of Europe is higher by more than 1 percent. Tokyo and Shanghai led Asia with gains of more than 1 percent as well.


Docket quiet until earnings Tuesday

October 9, 2015

Nothing is scheduled for today or Columbus Day on Monday, though companies may pre-announce results as earnings season approaches.


Stocks stall at top of recent range

October 8, 2015

S&P 500 futures are down 0.4 percent, while most of Europe is little-changed. Asia was mixed overnight, with Tokyo down 1 percent but Shanghai up 3 percent.


Monthly sales, Fed minutes on tap

October 8, 2015

Today brings a mix of events, including minutes from the Federal Reserve's last meeting. Select retailers report monthly same-store sales throughout the morning.


Stocks rally as earnings approach

October 7, 2015

S&P 500 futures are up half a percent, similar to the moves in Europe. Asia was mostly higher overnight, though China remained closed for a holiday. Oil is strong again.


Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »