Stock futures (/ES) are trading slightly lower pre-market after a choppy session on Wednesday. Yesterday saw downward pressure led by a decline in small caps (RUT, IWM) and the tech sector (QQQ). Ahead of FOMC chair Yellen’s testimony, stocks were down sharply but managed to rally back into the close. Day two of Yellen in front of congress will be with the Senate and she will discuss economic and fiscal outlooks. Option volatility picked up steam as investors sought out protection early in the day. Despite the weakness, the CBOE volatility index (VIX) finished relatively flat as stocks rallied into the close. The divergence between small caps and tech to the downside against the Dow and S&P 500 (SPX) has many market watchers nervous for a correction.
Treasuries are little changed to mixed at this point. The ECB and Bank of England left interest rates in check this morning. Many had expected President Draghi to act in order to combat the Euro-zone’s inflation but rates have remained unchanged for the last six months. He has a press conference scheduled this morning to defend the decision which has the potential to prompt some activity. Earnings are slowly winding down with just a handful of popular names reporting the rest of the week.
Stock Stories:
Keurig Green Mountain (GMCR) – Brewing –The single serve coffee company posted better than expected EPS and top-line revenue after the close yesterday. The company sold more Keurig machines than expected and slightly raises forward guidance. The shares up 6% in the pre-market.
Tesla Motors (TSLA) – Out of gas – The electric car-maker reported quarterly results that were higher than analyst estimates yesterday afternoon. The company however cited supply constraints on production. The stock is down 5% in the pre-market compared to the option market prediction of a move of 9% into the earnings call.
Major Economic Reports:
7:30 am CT– Weekly Jobless Claims
7:30 am CT– ECB Press Conference
8:30 am CT– FOMC Tarullo Speaks
8:30 am CT– FOMC Chair Yellen’s Testimony
9:30 am CT – Natural Gas Inventories
12:00 pm CT – 30-year Bond Auction Results
Notable Earnings:
Thursday 5/8:
Before Market: APA, CVC, DF, DISH, PCLN, WEN,
After Market: DVR, CBS, JCOM, JMBA, NVDA, NWS, SYMC, TUMI
