Dow Jones Industrial Average Futures Fall on North Korea Risk, Disney Earnings

Rising geopolitical tensions have the VIX jumping to levels not seen since early July

by Karee Venema

Published on Aug 9, 2017 at 9:12 AM
Updated on Aug 9, 2017 at 9:14 AM

Dow Jones Industrial Average (DJIA) futures are trading below fair value, as traders continue to monitor escalating tensions between the U.S. and North Korea. Specifically, North Korea hinted at a possible missile strike on U.S.-controlled Guam, following President Trump's "fire and fury" comments yesterday.

A negative earnings reaction for Dow stock Disney is adding pressure to the big-cap index, too, with news the company is ending its streaming partnership with Netflix sending the FAANG stock sharply lower, as well. As such, the Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) are on pace to follow the Dow lower, as U.S. stocks look poised for a second straight down day -- while futures on the CBOE Volatility Index (VIX) have jumped to levels not seen since early July.
 
Continue reading for more on today's market, including:

  • The stock volatility signal flashing for the third time ever, according to Schaeffer's Senior Quantitative Analyst Rocky White.
  • The hottest Dow stock right now.
  • Bets against the VIX are at an all-time peak.
  • Plus, Disney changes direction; the retail stock set to drop 22%; and geopolitical risk rattles global markets.

stock index futures august 9

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 920,532 call contracts traded on Tuesday, compared to 621,127 put contracts. The single-session equity put/call ratio fell to 0.67, and the 21-day moving average remained at 0.64.

  2. Shares of Netflix, Inc. (NASDAQ:NFLX) are trading 3.5% lower in pre-market trading, after Walt Disney Co (NYSE:DIS) announced Tuesday that it would end its partnership with Netflix and remove all Disney and Pixar movies from Netflix's platform by 2019. Disney -- down 5% in pre-market trading -- plans to roll out its own streaming service.

  3. Fossil Group Inc (NASDAQ:FOSL) cut its fiscal-year sales forecast after reporting adjusted second-quarter earnings that were weaker than expected. In turn, Wells Fargo, Jefferies, and Telsey cut their price targets for FOSL, which is down 22% in electronic trading, and could hit a multi-year low. The fashion accessories company also named board member Jeffrey Boyer as its new CFO, after Dennis Secor announced he would resign from the position in October for personal reasons.

  4. Vantiv Inc (NYSE:VNTV) clinched its $10 billion deal to buy Worldpay, an online payment processor in Britain. The holding company plans to combine the two companies to create a global payments powerhouse, which will be headquartered in Cincinnati, Ohio. Despite the news, VNTV is trading down 1.6% in pre-market trading.

  5. The regularly scheduled update on domestic crude inventories, along with productivity and labor costs, will come out today. Crocs (CROX), Dillard's (DDS), Impax Laboratories (IPXL), Intrexon (XON), Live Nation (LYV), Mylan (MYL), Office Depot (ODP), SINA (SINA), Stratasys (SSYS), Twenty-First Century Fox (FOXA), Weibo (WB), and Wendy's (WEN) will report earnings.

Buzz Stocks Aug 9

Overseas Trading

Stocks in Asia settled lower across the board today, as tensions ratcheted up between the U.S. and North Korea. A safe-haven surge for the yen pressured Japan's Nikkei to a drop of 1.3%, while South Korea followed suit with a 1.1% slump. Meanwhile, China's Shanghai Composite shed 0.2% as traders eyed a cooler-than-forecast reading on consumer inflation. Hong Kong's Hang Seng ended the day down 0.4%.

European bourses are also feeling the weight of renewed concerns about a possible missile strike by Pyongyang. With a risk-off attitude gripping global markets, France's CAC 40 has slipped 1.7%, the German DAX is down 1.5%, and London's FTSE 100 is 0.8% lower.

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