U.S. stock futures are in rally mode this morning, as Wall Street continues to cheer what some are calling a “dovish” interest rate hike from Federal Reserve. The Fed raised its key fed funds rate to a range of 0.75% to 1%, as expected, but said that it would hike rates only twice more this year, versus expectations for a much more hawkish tone.
On the economic data calendar, weekly jobless claims are due out ahead of the open, while reports on housing starts, building permits and the Philly Fed index are due later this morning.
Heading into the open, futures on the Dow Jones Industrial Average are up 0.3%, with S&P 500 futures gaining 0.19% and Nasdaq-100 futures jumping 0.21%.
On the options front, volume rebounded back above average on Wednesday as options traders engaged in a bit of positioning ahead of the Fed rate hike. Overall, roughly 17.7 million calls and 13.5 million puts crossed the tape. Over on the CBOE, the single-session equity put/call volume ratio plunged to 0.61 from Tuesday’s perch at 0.73, though the 10-day moving average edged higher to 0.64.
Turning to Wednesday’s volume leaders, Apple Inc. (NASDAQ:AAPL) saw increased call volume after RBC Capital boosted its price target on AAPL stock. Oracle Corporation (NASDAQ:ORCL) posted better-than-expected earnings and bumped its dividend, and Tesla Inc (NASDAQ:TSLA) announced it was raising $1.15 billion via stock and debt offerings to fund its Model 3 rollout.
Apple Inc. (AAPL)
More bullish news on AAPL stock hit yesterday, after RBC Capital reiterated the shares at “outperform” and lifted its price target to $155 from $140. RBC told clients that it believes Apple’s services unit could provide a considerable tailwind for annual revenue. The news helped bump AAPL stock north of resistance at $140, and could bring in technical buyers over the short-term.
AAPL stock options traders were jazzed about the development. Total volume spiked to more than 921,000 contracts, with calls snapping up an above average 64% of the day’s take. Looking out to the April series, we find that AAPL stock is now trading north of both peak call and put open interest at the $140 strike, totaling 84,500 contracts and 50,000 contracts, respectively.
If stock can pull away from $140 over the next week, it could be major boon for AAPL bulls. Otherwise, look for Apple shares to get pinned near $140.