Welcome to today’s Morning Coffee Break – hold on tight as today is “quadruple witching”.  For those unsure of what quarterly “quadruple witching” is, it’s a period of time simultaneous expiration of various options and futures contracts that happens once each quarter.  Doing a little digging we found that the last 8 times this has occurred in September, the Dow Jones has traded higher.  The Dow Jones also has been up for the last 8 Friday’s in a row. 

U.S. exchanges are pointing higher with the Dow Jones fair value at 39.05 and the S&P 500 fair value currently at 4.0901 and the NASFAQ with a fair value of 6.45.

The global economic calendar is quite with Canada’s CPI (YoY), Wholesale Sales, CPI(MoM) and Core CPI (MoM) all due out at 8:30 a.m ET. today.

Traders will get a chance to check under hood on Darden Restaurants (DRI, quote) home of Oliver Garden and Red Lobster along with home builder KB Home (KBH, quote) when both report earnings today.

Morning Coffee Break Global Markets Watch

Asia

Asia moved broadly higher during the overnight session as the Apple’s (AAPL, quote) launched its new iPhone pushing higher the telecommunication sector to end a volatile trading week including protest in China.

A few noteworthy downstream iPhone considerations to keep an eye going today and next week for trading opportunities are as follows.

In emerging market of Taiwanese iphone supply chain includes Hon Hai Precision Industry, Genius Electronic Optical and Cheng Uei Precision Industry. All traded on the Taiwan exchange.

In South Korea arch rival Samsung Electronics and screen manufacturer LG Display.

In Japan the iPhone reached out TDK Corp. and Foster Electrics.

Emerging Markets

Lukoil Holdings (LUKOY, quote) according to Lukoil Chief Executive Vagit Alekperov the company plans to postpone its secondary public offering in Hong Kong until after 2013. The delay seems to have stemmed from legal issues placing limits Russian issuers on the Hong Kong exchange.

Mr. Vagit Alekperov also went on to say in his statement that the board will consider interim dividend of roughly 25% of net profits at it next board meeting this October.  Lukoil is Russia’s second largest oil producer.

Morning Coffee Break Companies To Watch

Apple (AAPL, quote), Apple launches its iPhone in stores today and Apple die hard customers already camped out the stores.

Qualcomm (QCOM, quote) could has several chips in the iPhone, according to repair firm iFixit. The iPhone is also said to contain chips from Avago Technologies (AVGO, quote) and Skyworks Solutions (SWKS, quote).

Knight Capital (KCG, quote) moved Steven Bisgay into chief financial officer position and will also remain the company’s chief operating officer.

McDonald’s (MCD, quote) raised its dividend to $0.77 or by 10% from $0.70. To be eligible for the dividend market participant must own the share 3 trading days prior to the record date of December 3.  Remember it takes 3 days to settle your trade.  The dividend will be paid out on December 17.

Futures and Commodities Corner

Crude Oil

In electronic trading WTI crude oil arrested the fall and rebounded slightly to $93.25 higher by 0.90% as commodities in general receive a boost as the U.S. dollar moves lower going into the weekend.

Currently the rebound has help pair back the weekly loss to just shy of 6%.  Interesting takeaway from this week’s crude oil trading is that even the professional traders do not completely understand what the catalyst that sent crude oil sharply lower. Rumors of the strategic supply could be tapped and even comments from Saudi oil officials and rising inventories still leave traders wondering.

Equity only readers can gain exposure to WTI Crude Oil through the United States Oil Fund (USO, quote) ETF that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The USO will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

Gold

Gold moved higher as well during overnight trading today mostly due to the U.S. dollar moving lower. Gold remains within the flag pattern as we move into the weekend. The U.S. dollar is down 0.28% to 79.26 on the index suggesting if all remains status quo gold very well could remain in a tight trading range on the day and continue the flag pattern into next week.  The key to today’s trading for gold will be the last hour of trading in the pit and the closing price to close out the week.  Will there be profit taking?

Equity only readers gain exposure to the gold through the SPDR Gold Shares Trust (GLD, quote) ETF that seeks to replicate the performance, net of expenses, of the price of gold bullion. The GLD trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.

Crude Oil	$91.21	+0.79	+0.85%
Gold	$1,773.70	+5.90	+0.33%
Wheat	$889.50	+10.00	+1.14%
Corn	$750.00	+4.00	+0.54%
Live Cattle	$128.15	UNCH	UNCH
Lean Hogs	$74.20	UNCH	UNCH
Treasury Bond	146.625	-0.0938	-0.06%
10yr Note	132.4375	+0.0312	+0.02%
2yr Note	110.2031	UNCH	UNCH
U.S. Dollar Index	79.27	-0.21	0.26%%
			As of 7:26 a.m. ET

The Morning Coffee Break Bottom Line

Look for volatility as markets deal with  “quadruple witching” and traders reposition portfolios and if history repeats itself U.S. markets very well could be up today and possibly break even or even edge a gain on the week.   Be careful as with the future contracts expiring and rolling into the next months could be little rough.  Consider locking in profits by using Put protection or taking a little off the table.

Have a great weekend everyone!