U.S. stock futures are pointed tentatively higher this morning, with losses in crude oil weighing heavily on sentiment. Concerns are growing in the oil pits that OPEC may not reach a deal to cut production at this Wednesday’s meeting. Crude futures were last seen off 2.8% as a result.
Meanwhile, on the economic front, Wall Street will be digesting U.S. third-quarter gross domestic product (GDP), the September Case-Shiller home price index and the November consumer confidence report later this morning.
Against this backdrop, futures on the Dow Jones Industrial Average have edged 0.08% higher, with S&P 500 futures up 0.1% and Nasdaq-100 futures rising 0.1%.
On the options front, volume bounced back to more normal levels on Monday, with about 12.9 million calls and 12.1 million puts changing hands on the session. Over on the CBOE, the single-session equity put/call volume ratio dipped to a one-week low of 0.57, while the 10-day moving average notched its fourth-consecutive close in three-month-low territory at 0.60.
Among Monday’s volume leaders, Bank of America Corp (NYSE:BAC) stock traders may be rethinking the potential impact of financial deregulation under president Donald Trump, but it hasn’t slowed down call options traders. Elsewhere, Amazon.com, Inc. (NASDAQ:AMZN) dipped amid concerns of low Black Friday turnout this year, but analysts predict that Cyber Monday could make up the difference. Finally, McDonald’s Corporation (NYSE:MCD) joins the slew of stocks trading ex-dividend this week.
Bank of America Corp. (BAC)
While most financial industry watchers are expecting positive returns from the deregulation expected to flow from the Trump administration, some banks are beginning to show signs of concern.
For instance, banks like Bank of America spend hundreds of thousands complying with the Dodd-Frank rule, and changes could mean more money gone from the coffers. In fact, earlier this month, Bank of America’s COO Tom Montag indicated he was being “a little more cautious” about compliance spending.
As if to illustrate the point, BAC stock dipped more than 2.6% on Monday, pulling back to support in the $20 region. But, if options traders are concerned, they didn’t show it after coming back from the Thanksgiving holiday.
More than 753,000 contracts changed hands on BAC yesterday, with calls accounting for a sizeable 70% of yesterday’s take. That said, there is still room for more bulls on the BAC stock bandwagon, as the December total put/call open interest ratio currently rests at 0.90, with calls and puts in near parity heading into the end of the year.
Amazon.com, Inc. (AMZN)
The discount tags are still cooling off from Black Friday and Cyber Monday, but analysts are already a bit concerned that turnout was lower than expected in the kickoff weekend for the holiday shopping season. Still, more than $3.4 billion is projected to have been spent on Black Friday, with Cyber Monday’s totals expected to be even better, as consumers opted to shop online rather than in stores and malls. Naturally, Amazon could be a big winner here, with Piper Jaffray projecting that Cyber Monday could make up about 2% of Amazon’s total sales.
The enthusiasm has yet to translate into gains for AMZN stock, however, with the shares slipping nearly 2% yesterday. Even options traders were feeling less than excited about Amazon’s prospects, as calls only made up about 57% of the more than 166,000 contracts traded on the stock yesterday.
That said, AMZN’s December total put/call OI ratio has fallen from a perch near 1.0 to its current reading of 0.87, as calls continue to be added at a faster rate than puts among near-term options. A continuation of this call-buying trend could have bullish implications for AMZN stock.
McDonald’s Corporation (MCD)
While it’s shopping season for many consumers, it’s dividend season for U.S. corporations. McDonald’s is joining in that tradition next month, but only for shareholders of record as of the close of trading yesterday. MCD stock trades ex-dividend today, and will pay out a quarterly dividend of 94 cents per share on Dec. 15.
Naturally, MCD options traders flooded the stock with dividend capture plays on Monday to take advantage of the payout.
Total volume rose to a record short-term high of more than 387,000 contracts, with calls accounting for a hefty 96% of the day’s take.
As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.
