H-Bomb Reports Rattle Dow Jones Industrial Average Futures

H-Bomb Sinks Dow Futures; Plus, a Bad Omen for 2016?

by Alex Eppstein

Published on Jan 6, 2016 at 8:57 AM
Updated on Jan 6, 2016 at 9:09 AM

Dow Jones Industrial Average (DJIA)​ futures are getting hammered amid reports of a successful hydrogen bomb test by North Korea. As such, the Dow will likely open south of the 17,000 millennium level, while the S&P 500 Index (SPX) could test the key 2,000 area. Also weighing on investor sentiment is a sharp drop in crude, with February-dated futures last seen 3.3% lower at $34.79 per barrel. On the data front, ADP said private payrolls came in at 257,000 in December -- much higher than expected -- while minutes from last month's Fed meeting will hit the Street this afternoon.

Continue reading for more on today's market, including:


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Futures on the Dow Jones Industrial Average (DJIA) are nearly 277 points below fair value.

5 Things You Need to Know Today

 

  1. North Korea's nuclear test has sparked a global stock sell-off -- with one notable exception.
  2. The Chicago Board Options Exchange (CBOE) saw 685,261 call contracts traded on Tuesday, compared to 447,300 put contracts. The resultant single-session equity put/call ratio fell to 0.65, while the 21-day moving average edged down to 0.71. 
  3. Yet another Apple Inc. (NASDAQ:AAPL) business partner is in the spotlight this morning, amid mounting concerns over iPhone sales. Specifically, The Wall Street Journal reports Taiwan-based Foxconn has received a $12.6 million government subsidy to minimize unemployment amid a rash of layoffs. Separately, the Japan-based Nikkei news agency says it expects AAPL to cut production of its iPhone 6s and 6s Plus models by about 30% in the current quarter. In pre-market trading, the stock is down 2.4%, and on pace to test the $100 level.
  4. Starboard Value LP is urging Yahoo! Inc. (NASDAQ:YHOO) to make several changes to upper management, as well as its business strategy. "Despite over three years of effort and billions spent on acquisitions, the management team that was hired to turn around the core business has failed to produce acceptable results, in turn, causing massive declines in profitability and cash flow," the activist investor wrote in a letter delivered yesterday. YHOO is pointed 1.3% lower ahead of the bell.
  5. While Verizon Communications Inc. (NYSE:VZ) ponders the acquisition of YHOO's core business, the telecom titan is reportedly also planning to auction off all of its data center assets, hoping to raise at least $2.5 billion. The news has VZ shares down 2.4% in electronic trading.


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Earnings and Economic Data

Factory orders, the ISM non-manufacturing index, and the regularly scheduled crude inventories report will be in focus today. However, the main highlight will be the minutes from the December Fed meeting.

Elsewhere, Monsanto (MON) will report earnings and Costco Wholesale (COST) will release its December sales figures. Meanwhile, the Consumer Electronics Show (CES) will ramp up in Las Vegas, with Netflix, Inc. (NFLX) CEO Reed Hastings and GM CEO Mary Barra among the keynote speakers. To see what else is coming up on this week's agenda, click here​. 


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