Morning Bid with David Gaffen

With a week to go before the Federal Reserve meeting, markets are showing some signs of jitters. While most people would say that the Fed’s rate hike is priced in, the activity in the markets shows that in a week with scant news, it doesn’t take much to push things around and for people to show that they are worried about which direction things are going.

Let it not be said that December is not turning out to be somewhat interesting. Today’s activity will focus on a couple of different deal situations. The first is a potential merger of Dow Chemical Co and DuPont , both of which have been somewhat embattled in the recent months.

Headed into the last Federal Reserve meeting of the year, it looks this week’s wildcard is going to be the price of oil. With some more weak data out of China, the market is dealing with the reality that OPEC did not do anything to shut off the supply glut and that is continuing to have an effect on the stock market and other markets. Monday saw a downturn in oil prices and energy stocks again, especially Exxon and Chevron, which are the two largest oil companies in the United States.

The positive vibe in markets continues, with U.S. stocks steady after Europe rallied as well.

One of the primary themes that should dominate the week is one of the divergence between the Federal Reserve and the European Central Bank.

No fewer than 30 S&P 500 companies report results on Wednesday, from names as varied as Coca-Cola to American Express to Tractor Supply Co. It’s true to say that so far this has not been a great earnings season – 69 percent of companies have exceeded earnings expectations and only about 40 percent on revenue – but with just 65 names reporting as of early Tuesday, it’s also correct to say it’s early days, given the heavy action we’ll be seeing over the next couple of trading sessions.

Industrial projects, particularly large ones, tend to require lots of heavy equipment, like cranes, and so this week’s results out of Manitowoc, which makes big cranes used in various parts of the world, including Asia and the Middle East, reported pretty disappointing results, adding that it expected more softness going forward with margins remaining in the low single digits for all of 2015.

It’s worth asking whether the markets are running a little too hot, cold, or just right, given the recent run in stocks following the August-to-September swoon. Investors always have ways of finding doomsday-style evidence that indicates that one way or another, the market is doing the wrong thing, and all hell is about to break loose. Later on Thursday, we’ll detail one of these, the so-called “skew” index that measures the cost of put options versus call options, which is signaling some worrying things of late.

Nearly 10 full months into the year, the easy winner among S&P 500 companies in terms of share performance is Netflix, which has gained 132 percent, even as other major momentum names have been broad-sided by the weakness in stocks that generally benefit from positive price trends.

Equities have risen more than seven percent in the last eight sessions. Thursday’s Federal Reserve minutes became the latest ball of confusion fired on the markets, and those in the stock-market world smiled, and asked for another, pushing equities to their highest levels in some time. This is somewhat maddening.