Dow Futures Trade Lower After Retail Sales Data

Why IBM Is Getting Hammered

May 12, 2017 at 9:10 AM
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Dow Jones Industrial Average (DJIA) futures are trading below fair value this morning, which puts the blue-chip barometer at risk of a fourth consecutive loss. Retail stocks will continue to be in focus today following Thursday's negative earnings reaction for Macy's stock and several sector peers, and after retail sales in April rose by a smaller-than-expected margin, though March data was upwardly revised. Elsewhere on the economic front, consumer prices swung higher last month, which could strengthen the Fed's case for a June rate hike. This could have traders looking for clues in today's round of Fed appearances, with a speech from Chicago Fed President Charles Evans currently underway. 
Continue reading for more on today's market, including:

  • Why the IBM sell-off just keeps getting worse.
  • Read Todd Salamone's warning about a prolonged stay below SPY 240.
  • How 3 retail stocks -- from high-end to low -- reacted to sales reports. 
  • Plus, JCP stock set for record lows; rumors of a revived Sprint-TMUS merger; and, the cybersecurity stock bracing for a post-earnings slump. 

stock index futures may 12

Futures on the Dow Jones Industrial Average (DJIA) are 25 points below fair value. 

5 Things You Need to Know Today
  1. The Chicago Board Options Exchange (CBOE) saw 937,125 call contracts traded on Thursday, compared to 608,303 put contracts. The resultant single-session equity put/call ratio edged up to 0.65, while the 21-day moving average dropped to 0.67.
  2. J C Penney Company Inc (NYSE:JCP) said its quarterly loss more than doubled on a year-over-year basis, while same-store sales and overall revenue were weaker than expected. Against this backdrop, J C Penney stock is down 6% in electronic trading, set to open the session at a record low -- good news for one group of JCP options traders. 
  3. Sprint Corp (NYSE:S) and its largest shareholder Softbank are in early talks with T-Mobile US Inc (NASDAQ:TMUS) parent Deutsche Telekom AG about a possible merger between the two telecom firms, according to Bloomberg. Takeover talks between S and TMUS initially began in 2014, but were halted over regulatory concerns. Both Sprint stock and TMUS shares are trading higher ahead of the bell.
  4. Unlike sector peer FireEye, shares of Cyberark Software Ltd (NASDAQ:CYBR) are bracing for a post-earnings plunge. CYBR stock is down 8.4% in pre-market trading, after the cybersecurity firm offered up a lower-than-expected current-quarter outlook, and announced the acquisition of Conjur for $42 million. Plus, Summit Redstone Partners downgraded Cyberark shares to "hold."
  5. Data on business inventories and consumer sentiment are slated for release. Philadelphia Fed President Patrick Harker also has a speech planned, while and ArcelorMittal (MT) will wrap up the week's earnings reports. Next week, retail earnings will once again be in focus.

Buzz Stocks May 12

Overseas Trading

Stocks in Japan and South Korea took their cues today from Wall Street's weak Thursday finish. Tokyo-listed exporters struggled as the yen caught a safe-haven bid, while mobile gaming stock Netmarble Games settled nearly 2% lower in its Seoul trading debut. By the close, Japan's Nikkei was off 0.4%, while South Korea's Kospi slipped 0.5%. Elsewhere, Hong Kong's Hang Seng eked out a gain of 0.1%, while the Shanghai Composite capitalized on a fresh liquidity injection from the People's Bank of China to advance 0.7%.

European stocks are modestly higher at midday, with corporate dealmaking fueling the gains. Media names are leading the charge in Paris amid reports that Vivendi is looking to buy a stake in Havas, while Germany's United Internet is said to be eyeing an investment in Drillisch. At last check, the German DAX and London's FTSE 100 have each added 0.2%, while France's CAC 40 is 0.1% higher.


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