Daily Market Update – August 8, 2016 (7:30 AM)
Last week ended on a really high note, but didn’t do too much to change the overall tone of the week, despite the market finishing at another record high.
All of that sounds a little contradictory, but the week was still one of ennui, despite the week ending Employment Situation Report.
With retailers beginning to report their earnings this week, it remains to be seen whether the consumer is really coming alive and whether they will serve as the catalyst that will really give the FOMC a reason to raise interest rates.
Markets generally agreed on Friday that it was time for those rates to go higher.
But while they’re increasingly comfortable with the idea, there still has to be the kind of data that supports an increase.
That wasn’t the case back in December 2015, when the FOMC very likely mis-read the future prospects of the economy.
With abysmal GDP numbers it would really help the FOMC out quite a bit if national retailers had something good to say.
Even if they have nothing good to report for the quarter just passed, if only they could find the silver lining heading into the final half of 2016.
I don’t have too much cash to invest this week and only have a single position expiring and 2 ex-dividend positions.
That combination would make me want to seek out some opportunity, but after Friday’s strong move higher it really awaits to be seen if there’s anything left at the moment.
Futures this morning seem to suggest that we’re back to the listless trading that characterized most of the past 2 weeks in which the market had a consecutive losing streak while not really going down very much.
I’m likely to again be an observer, as much as I would like to open some new positions.
For those short the Marathon Oil puts, the company is ex-dividend next Monday.
For that reason, if faced with an assignment, I’m probably going to be more willing to take assignment rather than to roll it over, unless it’s very close to the strike.
In that case, the enhanced premium from rolling over of a volatile position may exceed the value of the dividend.
Otherwise, as is always the case, I would welcome the opportunity to sell calls on some uncovered positions and some more are within the price range where it may become possible, even as volatility is so very low.