Dow Jones Industrial Average Futures Dip as U.K. Triggers Brexit

What a 7-Quarter Win Streak Means for Stocks

Mar 29, 2017 at 9:01 AM
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Dow Jones Industrial Average (DJIA) futures are below fair value, indicating another lower start after the index managed to snap its eight-session losing streak with a triple-digit win on Tuesday. This morning, stocks are reacting to news out of the U.K., where Brexit negotiations have officially begun after Article 50 was triggered, and Prime Minister Theresa May is currently addressing Parliament. Closer to home, traders are digesting the latest round of corporate earnings, and awaiting another batch of Fed speakers.
 
Continue reading for more on today's market, including:

  • Schaeffer's Senior Quantitative Analyst Rocky White explores what a seven-quarter win streak for the S&P 500 Index (SPX) means for stocks.
  • The biotech stock that nearly tripled in one day. 
  • Why grey skies could be ahead for these 3 solar stocks.
  • Plus, a biotech popping on drug data; upbeat earnings send RH soaring; and the stock surging on buyout news.

Dow Futures March 29

Futures on the Dow Jones Industrial Average (DJIA) are 23.5 points below fair value.

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 741,957 call contracts traded on Tuesday, compared to 444,008 put contracts. The resultant single-session equity put/call ratio edged up to 0.68, while the 21-day moving average spent a fifth straight day parked at 0.65.
  2. Biotech issue Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) -- historically among the best performing stocks in the second quarter -- is set to open at a fresh annual high, up 16.8% in pre-market trading. Boosting the shares are upbeat results in a late-stage trial of the company's cystic fibrosis treatment, Kalydeco, used in combination an experimental drug. The brokerage bunch has already begun weighing in, with an upgrade and two price-target hikes spotted so far.
  3. A strong turn in the earnings confessional has furniture retailer RH (NYSE:RH) soaring 16.1% ahead of the bell, with Goldman Sachs and Telsey Advisory Group upwardly revising their price targets. The stock has been rallying hard off its February lows, and is set to add to its already 23.8% year-to-date lead.
  4. Chipmaker Exar Corporation (NYSE:EXAR) is on track to open at a three-year peak, booming 22% higher on news the company will be bought by MaxLinear, Inc. (NYSE:MXL) in an all-cash deal valued at $661.6 million, or $13 per EXAR share. The stock has roughly doubled over the past 12 months, but recently ran out of steam in the $11-$11.50 neighborhood, which has capped its gains since mid-2014.
  5. The week's tour of Fed speakers continues today with Chicago Fed President Charles Evans returning to the mic, while Boston Fed President Eric Rosengren, and San Francisco Fed President John Williams are also due to speak. On the economic front, updates on pending home sales and weekly crude inventories are due. Lululemon (LULU), Paychex (PAYX), and Progress Software (PRGS) will release their quarterly results.

Buzz Stocks March 29

Overseas Trading

It was a mostly positive finish for Asian stocks, as traders took a bullish cue from Wall Street, and prepared for the U.K.'s departure from the EU. Japan's Nikkei managed a slim 0.1% gain, even after disappointing February retail sales data. Meanwhile, Hong Kong's Hang Seng and South Korea's Kospi picked up 0.2% apiece. On the negative side of the ledger, China's Shanghai Composite surrendered 0.4%, as concerns about liquidity and monetary policy tightening weighed on stocks for a third straight day.

European markets are mixed following Britain's triggering of Article 50, which officially set Brexit in motion. London's FTSE 100 is down 0.3%, paring earlier gains after the pound reasserted itself, while on the economic front, Bank of England data revealed another sharp rise in consumer borrowing in February. France's CAC 40 is more or less unchanged, after Insee's consumer confidence survey for March stood pat at 100 -- in line with the long-term average. Germany's DAX, meanwhile, is up 0.5%.

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

 

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