Daily Market Update – August 10, 2016 (Close)



Daily Market Update – August 10, 2016 (Close)

Yesterday and Monday both started the week very quietly and the futures this morning seemed as if they were going to carry on with that tradition of the past week.

And once again, they did.

Things may change in a big way if retail earnings start coming in and are surprisingly strong or surprisingly weak. Last week’s Employment Situation Report gave interest rate hawks a little more to believe in, but the GDP was an argument in favor of the other side.

This week, as retailers begin to report and as Retail Sales data is released on Friday, we can either find validation for the hawks or another nail in the coffin for those betting on an interest rate hike coming in 2016, which is rapidly coming to its end.

Otherwise, once the retail reports are in, there won’t be very much left in this earnings season to move markets and so we’re back to an FOMC watch as meandering economic data comes in and everyone gets back to work on fiscal policy once Labor Day has come and gone.

With a single expiring position this week that happens to be a short put position that also goes ex-dividend on Monday, I actually wouldn’t mind being assigned the position, even as the dividend is a paltry one. Because of that dividend, I don’t have too much interest in rolling the position over, unless the net from the rollover is still going to be 1% or higher.

In that case, it may be worth giving up on the dividend and continuing to collect the premiums on the position.

Either way, it would be nice to either milk that position for even more or at least get some cash out of the position through assignment, as long as there’s an opportunity to recycle it somewhere.

Right now, those opportunities seem slight, though.

It’s pretty sad when the most exciting thing for the week may end up being whether to consider rolling over a position that goes ex-dividend tomorrow in order to either get more premium in exchange for early assignment or simply add to the accumulation of premium while still getting that dividend.

But that’s all today was expected to bring and at least in that regard it didn’t disappoint.

With an opportunity, or even a need to roll over that position in International Paper, now I actually hope that it does get assigned early, but I’m not counting on it.

Going forward another month with a new expiration date in exchange for 1.3% in premium in exchange for possibly giving up a 1% dividend would be worth it if assigned tomorrow. Even if not, I wouldn’t mind rolling up more premiums in the position if having to take it beyond the September expiration.

Longer term is becoming the name of the game.