Fed in Focus as Dow Jones Industrial Average Futures Rise

Buy Calls On These 2 Car Stocks

Mar 3, 2017 at 9:02 AM
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Dow Jones Industrial Average (DJIA) futures are above fair value, indicating a modestly higher start after stocks took a breather Thursday, with the large-cap index dropping triple digits. The S&P 500 Index (SPX) and Nasdaq Composite (COMP), meanwhile, appear set to open in the red. Rising odds of a March rate hike are in focus today, with traders awaiting a speech from Federal Reserve Chair Janet Yellen this afternoon, with several other central bank officials due to take the mic in the meantime.

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

  • Traders should consider buying call options on these 2 car stocks, if history is any indicator. 
  • Why 3D Systems Corporation (NYSE:DDD) could be due for a bounce. 
  • With volatility risks in focus, it might be time to pick up protective puts.
  • Plus, Costco tanks, a fast-falling cloud stock, and the chip stock that continues to exceed expectations. 

Dow Futures March 3

Futures on the Dow Jones Industrial Average (DJIA) are 27 points above fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 1,032,128 call contracts traded on Thursday, compared to 581,908 put contracts. The resultant single-session equity put/call ratio rose to 0.56, while the 21-day moving average slipped to 0.63.
  2. Retail stock Costco Wholesale Corporation (NASDAQ:COST) is taking a major hit in pre-market trading, sliding 4.4%, after the company's fiscal second-quarter earnings and same-store sales came up short of expectations. Most analysts have taken a bullish stance, though, with four firms raising their price targets, against just one price-target cut. Plus, the stock may have been due for a pullback anyway, since COST shares have been rallying in recent months, and now sport an overbought 14-day Relative Strength Index (RSI) of 76. 
  3. Nutanix Inc (NASDAQ:NTNX) is also getting crushed ahead of the open, with the shares pointed 20% lower. The risk-off approach comes after the company's current-quarter revenue forecast was lower than anticipated, resulting in a number of price-target cuts, on top of a downgrade to "underweight" at Morgan Stanley. The cloud stock -- which just went public in September-- is now on pace for its lowest open since early November. 
  4. Semiconductor firm Marvell Technology Group Ltd. (NASDAQ:MRVL) topped Wall Street's earnings expectations once gain, while also providing upbeat current-quarter guidance, sending the shares 4% higher in electronic trading. Similar to last quarter's earnings beat, analysts are responding in kind, with B. Riley among a number of analysts to raise its outlook, setting its price target at $21 -- territory not explored in six years. 
  5. Wrapping up the week's economic lineup is the ISM services index, plus speeches from Fed Vice Chair Stanley Fischer, Chicago Fed President Charles Evans, Richmond Fed President Jeffrey Lacker, and Fed Chair Janet Yellen. There are no notable earning on tap today, and next week's earnings calendar will be relatively quiet, as well.

Buzz Stocks March 3

Overseas Trading

Stocks in Asia ended the week on a negative note, following the bearish lead of U.S. markets, as commodity prices turned sharply lower on a strengthening U.S. dollar. The worst performer was South Korea's Kospi, which dove 1.1% amid reports of a potential trade war with China, due to the peninsula nation's deployment of a missile defense system. Speaking of the mainland, China's Shanghai Composite wasn't unscathed, falling 0.3%. Elsewhere, Japan's Nikkei dipped 0.5%, with bank stocks shedding weight due to a sell-off in U.S. bonds, while Hong Kong's Hang Seng lost 0.7%.

European markets are mixed, as traders consider the rising expectations of a Fed rate hike this month ahead of Yellen's speech. There's data to digest, too, with the eurozone composite purchasing managers index (PMI) rising to its loftiest level since April 2011, but retail sales declining for the third consecutive month -- down 0.1% versus an expected 0.4% increase. Turning to the indexes, London's FTSE 100 is down 0.3%, even though the pound dropped after February data showed the U.K. services sector expanded at the slowest rate in five months. Elsewhere, the German DAX is down 0.2%, while France's CAC 40 has advanced 0.6%.

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