Dow Jones Industrial Average Futures Fall Once Again

Is the Trump Trade Broken?

Josh Selway
Apr 4, 2017 at 9:07 AM
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It's shaping up to be another down day for the Dow Jones Industrial Average (DJIA), with futures trading well below fair value this morning. After a slow start to the second quarter, there could be little appetite for stock buying once again, as traders take a wait-and-see approach ahead of President Trump's Thursday meeting with Chinese President Xi Jinping. On the economic front, Wall Street is digesting a four-month low in the U.S. trade deficit in February, with factory orders data due out shortly after the opening bell. 

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

  • Is the "Trump trade" broken? Schaeffer's Senior V.P. of Research Todd Salamone weighs in.
  • This tech stock just hit a record low, but analysts say "buy" the dip. 
  • 4 reasons we passed on this chip stock
  • Plus, another NVDA downgrade; a big bull note for Caterpillar; and why Kate Spade shares are sinking despite buyout buzz. 

stock futures today

Futures on the Dow Jones Industrial Average (DJIA) are 66 points below fair value. 

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 694,779 call contracts traded on Monday, compared to 464,319 put contracts. The resultant single-session equity put/call ratio moved up to 0.67, while the 21-day moving average stayed at 0.64.
  2. A little more than a month after another big downgrade hit NVIDIA stock, the shares are set to lose 3% after Pacific Crest downgraded the shares to "underweight" from "sector weight." NVIDIA Corporation (NASDAQ:NVDA) stock hit an all-time high of $120.92 back in February, but closed Monday at just $108.38. 
  3. Dow stock Caterpillar Inc. (NYSE:CAT) is also in analysts' crosshairs, with Goldman Sachs adding it to their "Conviction Buy" list. The shares are up 1.3% ahead of the open, which would be a nice change of pace for shareholders, since CAT stock has been struggling in recent weeks amid tax fraud allegations. 
  4. Upscale accessories stock Kate Spade & Co (NYSE:KATE) is getting hammered in pre-market trading, shedding roughly 12%. Reuters yesterday reported that the company will take "a few more weeks" to consider and negotiate a takeover bid from Coach Inc (NYSE:COH), with Michael Kors Holdings Ltd (NYSE:KORS) also on the list of possible suitors. However, sources told Reuters the buyout offer would likely be below the stock's current valuation, which on Monday was just shy of $3 billion. 
  5. Acuity Brands (AYI) is the only notable company on the earnings front today.

Buzz Stocks April 4

Overseas Trading

Asian stocks ended the day mixed, as investors looked ahead to the highly anticipated meeting between President Trump and Chinese President Xi Jinping. Japan's Nikkei came under the most heat, losing 0.9% on a stronger yen -- with auto stocks and other exporters especially hard-hit. Likewise, South Korea's Kospi slid 0.3%. On the other hand, Hong Kong's Hang Seng advanced 0.6%. Meanwhile, markets on mainland China remained shuttered for a public holiday.

The upcoming Trump-Xi meeting is looming over European markets, too, which are largely lower as a result. Germany's DAX is down 0.2%, with financial stock Deutsche Bank down 3.5% on a C-suite shakeup, while the French CAC 40 is off nearly 0.1%. U.K.-based retail stocks like Sainsbury are getting creamed, too, amid concerns about inflation and waning market share. However, London's FTSE 100 has still managed a 0.4% gain, shaking off a slowdown in construction growth. Separately, the Bank of England's latest policy meeting minutes showed concerns about the potentially "weaker underwriting standards" of new lending, which "could reduce the resilience of lenders to shocks."


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