Slipping Oil, Trump Concerns Weigh on Dow Jones Industrial Average Futures

What This VIX Phenomenon Means for Stocks

Mar 22, 2017 at 9:09 AM
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Dow Jones Industrial Average (DJIA) futures are below fair value, indicating blue-chip stocks are set to continue their slide after finishing the worst session in six months on Tuesday. Growing concerns over President Donald Trump's economic plans are weighing on stocks, while a drop in oil prices is also putting pressure on the market. Specifically, May-dated crude futures are off 1.3% at $47.60 per barrel, amid lingering concerns about a global supply glut. Meanwhile, the S&P 500 Index (SPX) and Nasdaq Composite (COMP) are outperforming their large-cap peer ahead of the bell, with both appearing set to open a hair higher.
Continue reading for more on today's market, including:

  • Schaeffer's Senior Quantitative Analyst Rocky White explores what this VIX phenomenon mean for stocks.
  • The Trump concerns that sent steel stocks spiraling. 
  • 2 retail stocks trading near key technical levels
  • Plus, another analyst nod for Snap; Sears casts doubt on the future; and FedEx results get analyst approval.

Dow Futures March 22

Futures on the Dow Jones Industrial Average (DJIA) are 15 points below fair value.

5 Things You Need to Know Today
  1. The Chicago Board Options Exchange (CBOE) saw 1,032,128 call contracts traded on Tuesday, compared to 814,873 put contracts. The resultant single-session equity put/call ratio jumped to 0.79, while the 21-day moving average edged up to 0.64.
  2. Market newcomer Snap Inc (NYSE:SNAP) received its second "buy" rating from analysts. Specifically, Drexel Hamilton initiated coverage with this upbeat recommendation alongside a $30 price target -- about 50% above SNAP's close of $20.38 yesterday -- helping the stock add 1.6% in pre-market trading. Meanwhile, nine brokerage firms currently call SNAP stock a "hold" or worse.
  3. A fiscal year-end report from retailer Sears Holdings Corp (NASDAQ:SHLD) has raised concerns about the company's future, saying, "Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern." The stock is set to slide 17.6% at the open, widening its already nearly 40% year-over-year deficit, which may make short sellers glad they've stuck around.
  4. Delivery specialist FedEx Corporation (NYSE:FDX) fell short of earnings expectations, but optimistic comments about profit margins were enough to impress analysts, with no fewer than six firms raising their price targets on the stock. FDX shares are up 2.7% ahead of the bell after spending more than a month poised just above double-barreled support at the 50- and 80-day moving averages.
  5. Data on existing home sales and the weekly update on domestic crude inventories will be released today. Retailers Five Below (FIVE), Perry Ellis (PERY), and PVH Corp (PVH) will report earnings, as will Winnebago (WGO).

Buzz Stocks March 22

Overseas Trading

Asian markets were rocked after reports of a failed missile test out of North Korea, and amid concerns that the so-called "Trump rally" has run its course after U.S. stocks sold off. Japan's Nikkei was especially hard-hit, losing 2.1%, as a relatively stronger yen exacerbated selling pressure. Meanwhile, the Bank of Japan's (BOJ) January meeting minutes revealed board members rejected a potential bond yield target adjustment, and February exports jumped a sharper-than-expected 11.3% year-over-year -- the fastest pace since 2015. Rounding things out, Hong Kong's Hang Seng dropped 1.1%, while China's Shanghai Composite and South Korea's Kospi each surrendered 0.5%.

European stocks are taking it on the chin, as bank shares sell off on rising pessimism over the Trump administration's ability to implement economic reforms stateside. London's FTSE 100 has slumped 0.9% amid a stronger pound. Markets aren't much better off elsewhere, as the French CAC 40 and German DAX have sunk 0.6% and 0.5%, respectively.

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


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