Dow futures are trading above fair value ahead of a huge day of tech earnings
The
Dow Jones Industrial Average (DJIA) looks poised to bounce back after yesterday's decline, with Dow futures trading above fair value. While investors will continue to consider the impact of the Trump administration's
tax reform proposal, the attention today will no doubt turn to earnings. So far, traders are digesting earnings beats from the likes of Bristol-Myers Squibb Co (NYSE:BMY) and Comcast Corporation (NASDAQ:CMCSA), and the action will only pick up after the close, with
tech stocks Microsoft Corporation (NASDAQ:MSFT), Amazon, and Alphabet Inc (NASDAQ:GOOGL) all on the schedule. Meanwhile, weekly jobless claims and durable goods orders for March both missed estimates, and traders are digesting the European Central Bank's (ECB) decision to keep interest rates unchanged.
Continue reading for more on today's market, including:
- The FDA news that had this drug stock hitting new highs.
- This tech stock more than doubled analysts' earnings estimates.
- The Dow signal flashing for the first time since the election.
- Plus, Ford tops estimates; Under Armour tries to rally; and Paypal options traders set to cash in.
Futures on the Dow Jones Industrial Average (DJIA) are almost 29 points above fair value.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 841,489 call contracts traded on Wednesday, compared to 526,082 put contracts. The resultant single-session equity put/call ratio rose to 0.63, while the 21-day moving average stayed at 0.65.
- Ford Motor Company (NYSE:F) this morning reported better-than-expected first-quarter earnings, and the shares are up 2% in electronic trading as a result. F stock has struggled over the past year, but options traders are likely pleased with today's potential upside move.
- Under Armour Inc (NYSE:UAA) stock is set to get a lift today, after the company's first-quarter results topped what many have deemed low expectations across Wall Street. UAA shares are up 1.5% in pre-market trading, which would have them atop their 50-day moving average for the first time since late August.
- A number of bullish analyst notes have come through on Paypal Holdings Inc (NASDAQ:PYPL), as a result of the company's strong first-quarter results and upbeat outlook. The highest price targets this morning came from Susquehanna and KBW, which both raised the mark to $55, well above PYPL stock's record high of $45.04 from yesterday -- a level it should take out today, with the shares pointed 5.4% higher.
- International trade and pending home sales make up the rest of the economic data for today. Some other names on the earnings docket are Cliffs Natural Resources (CLF), Expedia (EXPE), MGM Resorts (MGM), Nokia (NOK), and Potash Corp. of Saskatchewan (POT).
Overseas Trading
For the most part, stocks in Asia reacted positively to U.S. President Trump's tax reform proposals. China's Shanghai Composite ended a volatile session with a gain of 0.4%, after Chinese President Xi Jinping's speech on financial regulation took a less aggressive tone than expected. The gains also came despite a slowdown in industrial profits last month, and a widening in the March services trade deficit. Elsewhere, Hong Kong's Hang Seng and South Korea's Kospi added 0.5% and 0.1%, respectively -- the latter lifted by a post-earnings surge in Samsung Electronics shares. Japan's Nikkei sat out the rally, settling down 0.2%, but trimmed deeper losses from early trading after the Bank of Japan left interest rates unchanged and boosted its economic forecast, as expected.
Amid a speech by ECB President Mario Draghi -- who said the central bank will leave rates unchanged, despite "diminished" downside risks -- stocks across the pond are in the red, with the euro jumping to its highest point since October vs. the dollar. London's FTSE 100 has dropped 0.5% on a stronger pound, even after upbeat corporate earnings from financial firm Lloyds and homebuilder Taylor Wimpey. Also, Germany's DAX is down 0.1%, with Deutsche Bank shares sliding on a lack of revenue growth, while the French CAC 40 has tumbled 0.3%.