Stock futures (/ES) are slightly higher in early trading despite the cautious tone in Asian markets due to the Ukraine situation. U.S. investors will be focused on the many earnings reports that will be released this week. Investors will also analyze the economic data slated to be released today, including the Chicago Fed National Activity Index and the leading economic indicators. Option volatility continues to weaken as stocks were up over 2% last week. We expect the ‘Fear Gauge’ remain low until we see a catalyst or earnings to provide a push higher.
Treasuries are little changed to lower in very quiet trading with most of Europe closed, along with Australia and Hong Kong. The 10-year Treasury yield is steady at 2.73%, the highest since April 4. There's increased anxiety over Ukraine after hopes for an accord to de-escalate were dashed, but there's little visible effect on the markets this morning. Japanese trade data disappointed, rising to a record deficit, with exporst rising only modestly. U.S. traders will turn attention to earnings report this week with a heavy calendar. Today's announcements include Netflix (NFLX), which reports after the close. The bond market will have to digest $96 B in shorter coupon supply beginning with tomorrow's $32 B 2-year sale.
Stock Stories:
Halliburton (HAL) – Beating – The energy services giant posts better than expected EPS and top-line revenue this morning. The company also raises its full-year forecast on improving on improving growth. The shares are up almost 1% this morning.
Yum Brands (YUM) – Spoiled – The owner of the KFC and Taco Bell brands gets analyst downgrade this morning. The stock has recovered from recent setbacks in China and the analyst believes the shares are fully valued. The stock is down 0.5% ahead of the opening bell.
Major Economic Reports:
7:30 am CT – Chicago Fed Activity Index
9:00 am CT – Leading Economic Indicators
Notable Earnings:
Before Market: HAL, HAS, KMB, RCI, STI
After Market: BXS, BOH, DE, GLF, HLX, NFLX, RMBS, WCN, ZION
