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Pre-Market Primer: Futures Flat With Full Economic Calendar, Quadruple Witching


We could see a lot of volatility today.

Stocks might end a winning streak today as investors digest a lot of economic data.

Consumer prices in the US advanced more than previously thought. CPI rose 0.7% in February after staying flat in January. A more modest rise of 0.5% was expected. Excluding food and energy costs, prices only rose 0.2%

The New York Federal Reserve reported that manufacturing in the New York region was not as good as expected. The Empire State survey came in at 9.64 this month after 10.04 in February. Economists predicted the index to hit 10.

Later this morning, the Reuters/University of Michigan consumer sentiment guage is expected to have risen to 78 this month from a final February reading of 77.6. Industrial production data for February is also expected to show a rise of 0.6% after a 0.1% fall in the month before.

Stock futures are mixed before the opening bell. The Dow (INDEXDJX:.DJI) had a milestone tenth straight day of gains yesterday. Pre-market futures are down 0.01% at 14,451 before the opening bell. S&P 500 (INDEXSP:.INX) futures are also down 0.01% at 1,555.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.10% to 2,802.75.

Today is a day of quadruple witching, as stock index futures, index options, and options and futures on single stocks all expire. We could see a lot of volatility ahead today.

European shares fell as leaders met to debate scaling back austerity policies and the Eurogroup of finance ministers discusses the bailout of Cyprus. Asian markets were mixed, with Japanese stocks rallying as monetary doves were confirmed to posts in the Bank of Japan by the higher house of Parliament.

Italy's debt crossed the historical threshold of 2 trillion euros today as Parliament meets for the first time since the inconclusive election almost three weeks ago. Bond yields crept up as lawmakers still haven't made progress on choosing leadership.

Eurozone inflation fell to 1.8% in February, down from 2% in January. This is the smallest rise in consumer prices since 2010, indicating that wages are stagnant. Again, some are taking this to indicate the European Central Bank is more likely to cut interest rates.

Samsung (PINK:SSNLF) unveiled its flagship Galaxy S4 smartphone at a New York event yesterday. The phone has eye-tracking software, an updated camera, and a feature that lets you hover over the phone surface to make commands. The hardware looks similar to the Galaxy S3, but it's thinner and lighter. Samsung shares fell after the launch event.

In the second round of stress tests, the Fed approved buybacks and dividends for the major banks with the exception of Ally (NYSE:GMA) and BB&T (NYSE:BBT). However, Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) were told to "address weaknesses in their capital plans or capital planning processes that were significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests."

JPMorgan and Goldman can proceed with capital return programs, but must resubmit their request to do so in the third quarter to prove that their balance sheets have improved.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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