Options traders heavily favored calls on the Financial Select Sector SPDR ETF (XLF) Monday, buying 4.5 times more calls than puts. The positioning precedes a critical week for U.S. banks, as several major institutions begin reporting quarterly results Tuesday. The SPDR S&P Regional Banking ETF (KRE) saw four times more puts purchased than calls, signaling bearish sentiment toward regional lenders.
Bank of America shares rose 11.5 percent in the three months since its last earnings report, trading 2 percent below its July high. Citigroup advanced 11 percent over the same period, 5 percent shy of its June 18 high. Goldman Sachs gained 17 percent in three months, 7 percent from its mid-June high.
JPMorgan Chase rose 6.7 percent since its prior earnings release, sitting 2.6 percent below its June high. Wells Fargo recorded a 1 percent gain in the past three months but remains 10 percent off its January high.
Bank of America CEO Brian Moynihan and Wells Fargo CFO Mike Santomassimo are scheduled to appear on CNBC Tuesday. Goldman Sachs CEO David Solomon will join the "Halftime Report" at noon.
Crude oil prices surged Monday, with both Brent and West Texas Intermediate benchmarks climbing more than 9 percent. Brent crude traded back above $80 a barrel, driven by escalating tensions in the Strait of Hormuz. Iran continues attacking ships in the critical shipping lane, prompting a U.S. military response inside Iran.
Chevron shares gained 3.3 percent Monday, extending a weekly rise of 8 percent and a July gain of 10 percent. The stock remains 15 percent below its March 30 high. Exxon Mobil advanced 4 percent Monday, contributing to a 6 percent weekly increase and a 6 percent gain in July. Exxon Mobil is 18 percent below its March 30 high.
RBOB gasoline futures rose 5 percent in the past week, pushing the average price of a gallon of regular gasoline across the United States to $3.876. U.S. Energy Secretary Chris Wright will appear on CNBC's "Closing Bell Overtime" on Tuesday.
The SPDR S&P Retail ETF (XRT) posted a fractional decline in the past week and trades 4.6 percent below its January high. Rising gasoline prices threaten a pullback in retail spending.
August retail sales data is scheduled for release Tuesday at 8:30 a.m. ET. Economists anticipate a 0.3 percent rise for the month. The Consumer Price Index for the prior month will also be released Tuesday at 8:30 a.m. ET. The Dow Jones consensus estimate projects a 0.2 percent month-to-month drop in headline CPI. Excluding food and energy, the consensus calls for a 0.2 percent gain from the previous month.
Major U.S. equity indices traded slightly lower Monday as investors awaited these reports. The Nasdaq closed at 26,605, down 0.3 percent. The S&P 500 finished at 7,753, down 0.1 percent. The Dow Jones Industrial Average dropped 0.1 percent, closing at 53,976.
