Stock futures (/ES) point to about a flat open following a rough couple of sessions and as earnings season really begins to get going this week. The market closed on Friday at its lowest point in more than two months, and bullish investors are hoping to see a reversal of the recent weakness. Today investors will analyze earnings reports, retail sales reports, and business inventories reports that will be released throughout the day. The CBOE Volatility Index (VIX) rose sharply last week and closed above the $17 level for the first time in a month. This downturn in stocks seems heavier than previous ones which were consistently ‘Buy on the Dip’ scenarios. Any positive momentum for equities could push option volatility down sharply once again but caution is warranted.
Treasuries are off slightly after rising sharply during last week equity sell-off. The 10-year yield is at 2.62% and continues to trade in a tight range below 2.8%. Increasing tensions in Ukraine and somewhat dovish comments from ECB's Draghi on Saturday helped support global bonds. European shares are solidly lower as the tension in eastern Ukraine escalates, with pro-Russian gunmen in several cities ignoring a deadline to disarm and leave government buildings that they'd seized. Euro-zone industrial production rose 0.2% on month in February, as expected, after being unchanged in January. It will be a busy week in the U.S, with global trading abbreviated by Good Friday holidays (Europe is also closed for Easter Monday), while Passover this week may also thin activity.
Stock Stories:
Yahoo (YHOO) – Still Overbought? – The internet search giant gets analyst upgrade this morning after the stock fell 21% over the last few months. The firm’s valuation is getting a huge boost from the stake it has in Alibaba, which is rumored to IPO in the next month or so. Shares are up 1.4% in the pre-market.
Facebook (FB) – Financial Time-waster too? – The social media giant is allegedly seeking regulatory approval in Ireland for a service to that would allow users to store and exchange money on its website. The company has also discussed potential partnerships with at least three London start-ups that offer international money transfer services online and via smartphones.
