Futures were slightly up ahead of the open of the overseas markets but had weakened before Wall Street was ready for business. Some of the tentativeness can be blamed on the Volcker Rule that is being implemented by the zombies today. The law generally prohibits banks from dabbling in proprietary trading, or speculative trading, for their own profits.
There seems to be some loopholes as to what banks can and can’t do but they have been prepared for the new legislation so we don’t see it as a big deal. Neither does the sector as most of the Financial stocks are getting pops.
Elsewhere, the U.S. JOLTS report showed job openings rose 42,000 in October to 3,925,000, a new five year peak. Hiring fell 123,000 to 4,509,000 while quitters increased 58,000 to 2,385,000. Most economists and Fed Heads favor this report over the Nonfarm Payrolls report and the unemployment number as it provides a more accurate update on the jobs picture.
In earnings news, Pep Boys (PBY, $12.50, down $0.91) shares are down 7% and have traded to a low of $11.62. The company reported a profit of $0.02 a share for the quarter on revenue of $507 million. The suit-and-ties were looking for a profit of 14 cents on sales of $521 million.
The stock always seems to trade lower on earnings and we should have taken advantage of the event as we have played this name in the past.
We should have taken a one-day trade on the Pep Boys December 13 puts (PBY131221P00013000, $1.00, up $0.70) as they are up 233% after opening at $1.22 today. They were at 30 cents ahead of yesterday’s close.
The indexes are slightly lower as we make the turn with the Dow down 25 points to 16,000 while the S&P 500 is lower by 3 points to 1,805. The Nasdaq is off 5 points to 4,063 while the small-caps are at 1,122 – down 7 points.
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