Dow Jones Industrial Average Futures Signal Upside; Earnings in Focus

This Semiconductor Stock's Rally Could Have Legs

by Josh Selway

Published on Oct 27, 2016 at 9:06 AM

Dow Jones Industrial Average (DJIA) futures are trading above fair value, as Wall Street prepares for another huge day of earnings. Notably, traders are digesting the latest figures from Twitter Inc (NYSE:TWTR) and Tesla Motors Inc (NASDAQ:TSLA), and await quarterly numbers from tech heavyweights Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOGL) after the close. Stocks are also reacting to this morning's economic data. Specifically, durable goods orders unexpectedly fell in September, while weekly jobless claims dropped by less than expected. 

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

U.S. Stock Futures October 27

Futures on the Dow Jones Industrial Average (DJIA) are 54.7 points above fair value. 

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 781,276 call contracts traded on Wednesday, compared to 572,257 put contracts. The resultant single-session equity put/call ratio moved up to 0.73, while the 21-day moving average remained at 0.64.
  2. TWTR is gaining in pre-market trading, up 4.3%, after the social media firm topped Wall Street's revenue estimates. It also announced plans to cut 9% of its workforce as part of a larger restructuring. Meanwhile, traders will also continue to consider the latest M&A buzz
  3. Speaking of M&A buzz, NXP Semiconductors NV (NASDAQ:NXPI) is set to add 2.6% at the open, on news QUALCOMM, Inc. (NASDAQ:QCOM) will buy the company for $47 billion in cash, or $110 per share. Of course, NXPI has already jumped 20% since the buyout rumors began to swirl late last month. 
  4. Another pre-market gainer is electronic automaker TSLA, after reporting its first quarterly profit in over three years. TSLA is set for a nearly 5% bounce when the market opens -- though recent call buyers will be hoping for even a little more upside than that. 
  5. Pending home sales will round out today's economic schedule, with Cirrus Logic (CRUS) and Expedia (EXPE), among others, set to report earnings after the market closes. 

Buzz Stocks Oct 27

Overseas Trading

It was another largely negative finish for Asian markets today, with energy stocks under pressure after oil prices declined overnight. Traders are still on edge over whether the November Organization of the Petroleum Exporting Countries (OPEC) meeting will result in an official agreement to cut production. Also weighing on stocks in the region was data out of China, showing a slowdown in industrial profit growth for September.

China's Shanghai Composite dropped 0.1%, while Hong Kong's Hang Seng fell 0.8%, and Japan's Nikkei gave back 0.3%. South Korea's Kospi bucked the trend, adding 0.5% for the day, after smartphone maker Samsung reported in-line earnings, with co-CEO J.K. Shin offering an apology to shareholders regarding the Galaxy Note 7 debacle.

Stocks in Europe are modestly lower at midday, despite gross domestic product (GDP) data out of the U.K. showing 0.5% economic expansion for the third quarter. The result was greater than the 0.3% expected, but still shy of the second quarter's 0.7% growth. Corporate earnings continue to headline the week in Europe, and mining stocks in the region are slumping following China's industrial data release. At last check, London's FTSE 100 is just below breakeven, France's CAC has shed 0.2%, and Germany's DAX is essentially flat.

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