July 31st Morning Outlook

US Dollar Futures -.1%

Silver futures  +1%

Gold Futures +.4%

Some notable movers this morning.

AAPL is up over 1% early on, seeing a continuation of its move yesterday.

COH is down 14%.  X up 3% after reporting their earnings.  From last night STX is down 10%.

We have the FED meeting starting today the market is anticipating some form of QE, but likely it won't come until September.  We have the ECB on Thursday and we will see if Draghi has anything more than verbal promises after his bold statements helped to ramp markets late last week.  On Friday we have the monthly jobs report.  Compared to the trading action we saw yesterday I think the volatility will increase as the week progresses.  We are getting close to that $140 figure on the SPY.  Currently we are well above support and another breakout higher will put us in reach of this years highs.  To think after all the doom and gloom, the markets are climbing all the way back.  I've said it 100 times, and I will say it 101 times, the central banks will not let this house of cards collapse.  They will use all means necessary to keep asset prices inflated.  When we do finally get that collapse it will be because the CB's have run out of bullets.  In my opinion we are far worse off than we were in late 2008/2009.   But that is relevant for another day.  Today the markets don't care about earnings, the massive national debt, the market only cares about more printing and bond buying from the central banks. Later this week we will find out just how much from the FED and ECB.

Some possible trades I will be looking at today.  We have MA  Mastercard earnings tomorrow morning, I will be looking  to play those earnings via V Visa  PUTs, likely the $125 strike.  HOG reports before the bell tomorrow as well.  I also like PUTs although I am less likely to open a position,  I will let you know in the chat room if I do.

After the bell tomorrow we have FSLR, GMCR, MAKO, and RIG reporting.  I may position myself in at least one for earnings, most likely a strangle on RIG.  I played RIG for its previous earnings report and made a nice 300% gain on the calls.

With the anticipated market volatility this week you need to stay nimble.

 

The dollar is holding steady, near flat on the session vs the yen and modestly lower vs the euro after June reports on personal income, spending and core PCE -- one of the Fed's preferred reports on inflation -- came in close to expectations. Personal income rose 0.5%, just above the 0.4% forecast. But spending was flat on the month, while economists were expecting a modest 0.1% increase. Core PCE rose at a 0.2% rate, which matched forecasts. The largely unsurprising data allowed the dollar to remain near flat on the session against the yen. The dollar is at Y78.16 from Y78.15 just before the data were released and Y78.17 late Monday, according to EBS via CQG.

 

The U.S. Federal Reserve starts its two-day interest-rate meeting later in the global trading day.

The European Central Bank and the Bank of England will both meet on Thursday to decide on interest rates.

"We would expect that aside from ongoing headline risks, as regards ongoing rhetoric among policy makers and politicians in Europe, we would expect euro/U.S. dollar will continue to range trade," said Jeremy Stretch, currency strategist at CIBC in London.

The euro traded at $1.2279, up from $1.2256 in late trading on Monday. while the British pound fetched $1.5660, down from $1.5704 on Monday.

ECB President Mario Draghi last week stirred expectations for ECB action on Thursday by stating that the ECB will do what it takes within its mandate to save the region from disintegration.

Against the Japanese currency , the dollar bought 78.14 yen, little changed from ¥78.19 in late North American trading on Monday.

The Australian dollar moved to $1.0520, up from $1.0498 in late trading in the previous session.

The WSJ dollar index , a recently launched gauge of the dollar's performance against other heavily traded major currencies, traded at 71.75, down from 71.81.