Dow Jones Industrial Average Futures Slip on Latest White House Moves

The Factor That 'Trumps' All Other Indicators

Mar 7, 2017 at 9:10 AM
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Dow Jones Industrial Average (DJIA) futures are modestly below fair value -- setting the index up for its first back-to-back declines in weeks -- as traders digest the latest policy moves from President Donald Trump. At the forefront this morning is Monday's revised travel ban, as well as a plan to replace Obamacare, which was released by Republicans in Congress last night, and is being called the American Health Care Act. In addition, an early Trump tweet stating drug "pricing for the American people will come way down" has Dow stocks Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) in the red. On the economic front, stocks are reacting to a 9.6% jump in the U.S. trade deficit for January -- slightly less than predicted -- with the $48.5 billion deficit nonetheless representing a five-year high.

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

  • Schaeffer's Senior V.P. of Research Todd Salamone on the factor that "trumps" all other indicators. 
  • Why options action on this gold ETF may be ringing alarm bells. 
  • How the latest travel-ban revision sent one airline stock sliding.
  • Plus, TerraForm Global finds a buyer, Dick's reports earnings, and Weatherford names a new chief executive. 

Dow Futures March 7

Futures on the Dow Jones Industrial Average (DJIA) are 12 points below fair value.

5 Things You Need to Know Today
  1. The Chicago Board Options Exchange (CBOE) saw 803,109 call contracts traded on Monday, compared to 540,454 put contracts. The resultant single-session equity put/call ratio slipped to 0.67, while the 21-day moving average remained at 0.63.
  2. TerraForm Global Inc (NASDAQ:GLBL) -- a spin-off of bankrupt Sunedison Inc -- is up 17.7% ahead of the bell, on pace to open at a fresh annual high, on news it will be bought by Brookfield Asset Management Inc (NYSE:BAM). The buyout offer is valued at $787 million in cash, or $5.10 per share, with Brookfield also assuming some $455 million in debt.
  3. Dick's Sporting Goods Inc (NYSE:DKS) reported fourth-quarter earnings that beat expectations, but a disappointing current-quarter outlook has the shares down 2.7% in electronic trading. Options traders were largely betting on a post-earnings uptick for DKS. 
  4. Oil-and-gas stock Weatherford International Plc (NYSE:WFT) is set to open 15.3% higher, after naming Mark McCollum, former Halliburton Company (NYSE:HAL) chief financial officer, as its new CEO. The gains could put WFT shares at levels not seen since last June, and help the stock take out its 320-day moving average for the first time since October 2014.
  5. Today's economic calendar is rather quiet again, but Cerus (CERS), DKS, H & R Block (HRB), Michaels (MIK), and Urban Outfitters (URBN) are all set to step into the earnings confessional.

Buzz Stocks March 7

Overseas Trading

Asian markets ended Tuesday mostly higher, despite Deutsche Bank sparking a sell-off among financial stocks. Japan's Nikkei ended in the red, giving back 0.2%. However, South Korea's Kospi gained 0.6%, shaking off concerns over North Korea's ballistic missile tests and a looming court decision on collusion allegations against President Park Geun-hye. Elsewhere, China's Shanghai Composite added 0.3%, amid news that the nation's foreign-exchange reserves unexpectedly rose for the first time in eight months, hurdling the $3 trillion mark. Rounding things out, Hong Kong's Hang Seng muscled 0.4% higher.

European bourses are mixed, as traders react to a raft of economic data and growing prospects of a U.S. interest rate hike. Germany's DAX is up 0.1%, even after industrial orders suffered their sharpest decline since early 2009. London's FTSE 100 has gained nearly 0.1%, as well, as the pound weakens. That said, data revealed growth in U.K. home prices dropped to its slowest pace since July 2013, while retail sales fell 0.4% year-over-year in February. Sitting in the negative territory is France's CAC 40, last seen 0.3% lower.

Stay on top of breaking stock market news with Schaeffer's Midday Market Check.


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