Caterpillar (CAT) announced at a conference yesterday that it expects record revenues and profits in 2012. It sees 2012 at the upper end of the $8.00 – $10.00 guidance. The company sees 2015 revenues in the range of $80 to $100 billion. Consensus is $97.1 billion so the 2015 guidance was viewed as a slight negative.
Later this morning, we will get some new data that has the potential to spark some added trading action. The S&P/Case-Shiller home price index for July (consensus +0.8%; prior +0.5%) will be released at 9:00 a.m. ET and will be followed by the Conference Board’s Consumer Confidence report for September (consensus 63.0; prior 60.6) at 10:00 a.m. ET.
The S&P 500 earnings yield as a percent of junk bond yields are almost 100%. What this means that the S&P earnings yield and junk bond yields are roughly equivalent at about 6.6%. Measured in this manner, stocks have not been this inexpensive relative to bonds for more than twenty years.
In options, there was a buyer of 3,000 Graftech International (GTI) Nov 10 calls. This is 27x normal volume.
In Forest Laboratories (FRX), there was a buyer of 16,000 Jan 41 calls. This was 38x normal volume.