Dow futures are trading slightly above fair value as traders await Trump's tax plan
After two huge days for
stocks,
Dow Jones Industrial Average (DJIA) futures are signaling a more cautious open, trading just above fair value. Wall Street is anxiously awaiting the Trump administration's plan for
tax reform, which is expected to be revealed later today. This morning, Treasury Secretary Steven Mnuchin confirmed the plan will include a corporate tax rate of 15%, compared to the current rate of 35%, and said it will be the "largest tax reform in the history of our country."
Traders are also digesting a mixed bag of corporate earnings. Dow stock United Technologies Corporation (NYSE:UTX) is pointed higher after the company's quarterly report, while fellow blue chips Boeing Co (NYSE:BA) and Procter & Gamble Co (NYSE:PG) are headed lower after earnings. Oil prices could make headlines today, too, with an update on domestic crude inventories due out shortly after the opening bell.
Continue reading for more on today's market, including:
- What Nasdaq 6,000 means for stocks, based on research from Schaeffer's Senior Quantitative Analyst Rocky White.
- The China news that gave Netflix, Inc. (NASDAQ:NFLX) a lift.
- 2 mining stocks sporting attractive pre-earnings premiums.
- Plus, Twitter shares soar; Pepsi stock slides; and U.S. Steel's big earnings letdown.
Futures on the Dow Jones Industrial Average (DJIA) are almost 13 points above fair value.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Tuesday, compared to 646,103 put contracts. The resultant single-session equity put/call ratio stayed at 0.61, while the 21-day moving average moved down to 0.65.
- Those who purchased Twitter Inc (NYSE:TWTR) call options ahead of earnings are likely cheering this morning, with shares of the social media concern up 11.5% ahead of the open. The company reported better-than-expected user growth for the first quarter, and although revenue declined for the first time since TWTR went public, it topped analysts' expectations. If the pre-market gains hold, it'd be the stock's highest open since Feb. 21.
- PepsiCo, INc. (NYSE:PEP) stock, on the other hand, is eyeing a post-earnings loss today, even though first-quarter earnings and revenue topped expectations. "The quality of the quarter was disappointing as organic revenue, gross margin, and operating margin all came in weaker than we anticipated," said analysts at J.P. Morgan Securities. Still, it's been a great year for PEP stock, which touched a record high of $114.61 on April 18, before closing yesterday at $114.16.
- Steel stock U.S. Steel Corporation (NYSE:X) is getting hammered in electronic trading, shedding 18.4%, after whiffing on earnings. The company cited "operating challenges" at flat-rolled facilities. X stock is now on pace to trade below its 200-day moving average for the first time in more than a year, though, even with the pre-market losses, it would still be trading above its pre-election price near $20.
- Anthem (ANTM), F5 Networks (FFIV), Fiat Chrysler (FCAU), Goldcorp (GG), and Paypal (PYPL) are some other names on the earnings calendar today.
Overseas Trading
Stocks in Asia followed the bullish lead of their U.S. counterparts, ahead of the expected unveiling of President Trump's tax reforms. Japan's Nikkei shot 1.1% higher as the yen weakened relative to the dollar. Meanwhile, Hong Kong's Hang Seng gained 0.5% on the back of gaming stocks, which rallied after Wynn Resorts, Limited (NASDAQ:WYNN) -- owner of Wynn Macau -- posted upbeat earnings. On the mainland, China's Shanghai Composite edged up 0.2%, while South Korea's Kospi tacked on 0.5%.
European markets are mostly lower, as tailwinds from the French presidential election start to die down and downwardly revised credit scores hit utilities stocks. France's CAC 40 is hovering around the flatline, after April's consumer confidence index held steady month-over-month at 100. London's FTSE 100 and Germany's DAX aren't as fortunate, down 0.1% and 0.2%, respectively, as traders eye the Trump tax plan and a slew of corporate earnings.