Dow Jones Industrial Average Futures Falter With Trump-Xi Meeting In Focus

The $6B Healthcare M&A Buzz Moving Stocks This Morning

Apr 6, 2017 at 9:00 AM
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After blowing a triple-digit lead on Wednesday, it could be another slow start for the Dow Jones Industrial Average (DJIA). Specifically, Dow futures are trading just below fair value ahead of the open, as traders continue to weigh yesterday's Fed meeting minutes, which revealed the central bank's plans to begin trimming its massive balance sheet. Political uncertainty could also pressure stocks, with President Donald Trump set to meet with Chinese President Xi Jinping. Plus, House Speaker Paul Ryan last night said the House, Senate, and White House "weren't on the same page yet on tax reform." As for economic news, weekly jobless claims came in below estimates at 234,000. 

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

  • Goldman Sachs: Buy this underperforming energy stock.
  • How short sellers could throw a wrench into the Trump rally. 
  • TASER International (TASR) is now Axon Enterprise -- and it's giving away its stun guns for free. 
  • Plus, AMD stock takes a hit; CarMax beats; and the $6 billion healthcare M&A buzz. 

stock futures today

Futures on the Dow Jones Industrial Average (DJIA) are 4 points below fair value. 

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 818,417 call contracts traded on Wednesday, compared to 496,230 put contracts. The resultant single-session equity put/call ratio edged down to 0.61, while the 21-day moving average stayed at 0.64.
  2. Chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD) is set to pull back 3.3% at the open, after Goldman Sachs initiated coverage with a "sell" rating and $11 price target. As of Wednesday's close at $14.17, AMD stock sported a 12-month advance of more than 400%. 
  3. CarMax stock is getting a lift in pre-market trading, thanks to the company's better-than-expected fourth-quarter results. The shares needed a boost, too, as they're down 18% since hitting an annual high of $69.11 on Feb. 16 to close Wednesday at $56.66. Still, KMX options traders have remained seemingly optimistic. 
  4. Shares of healthcare firm Medtronic PLC (NYSE:MDT) are also set to open in positive territory, thanks to a Reuters report late Wednesday that Cardinal Health Inc (NYSE:CAH) may buy the company's medical supplies business for roughly $6 billion. At last night's close of $80.24, MDT stock is already up 12.7% year-to-date. 
  5. Constellation Brands (STZ), Fred's (FRED), PriceSmart (PSMT), and Schnitzer Steel (SCHN) will step up to the earnings mic.

premarket stock movers april 6

Overseas Trading

Asian markets mostly stumbled after Wednesday's Fed minutes revealed plans for the central bank to trim its $4.5 trillion balance sheet. Anxiety also ran high ahead of the highly anticipated Trump-Xi meeting, where North Korea's recent ballistic missile test will be in focus. Japan's Nikkei fell the furthest, losing 1.4% and notching a four-month low, as a stronger yen pressured auto stocks. Also finishing lower were South Korea's Kospi and Hong Kong's Hang Seng, shedding 0.4% and 0.5%, respectively.

However, China's Shanghai Composite advanced nearly 0.4%, shaking off the Caixin services purchasing managers index (PMI) for March, which revealed the slowest growth rate in six months. Meanwhile, a showdown could be brewing between China and the Philippines, after the latter boosted its military presence in the South China Sea.

European stocks are mixed at midday, as traders react to the Fed minutes, as well as a speech by European Central Bank (ECB) President Mario Draghi. Specifically, Draghi said the ECB is "confident our policy is working," but emphasized that "a reassessment of the current monetary policy stance is not warranted at this stage." On the positive side of the ledger is the French CAC 40, up 0.4%. But London's FTSE 100 is down 0.3%, while Germany's DAX is off 0.1%, after a weaker-than-expected rebound in manufacturing orders in February.

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