Dow, S&P Futures Swing Higher After Inflation Data

The VIX is pacing for its biggest weekly advance since December 2015

Aug 11, 2017 at 9:16 AM
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The Dow Jones Industrial Average (DJIA) has shed more than 274 points over the past three days, amid fear of North Korea's potential nuclear attack on U.S.-held Guam. However, despite President Trump's tweet this morning that "Military solutions are now ... locked and loaded," futures on the blue-chip index are trading slightly above fair value, as a lower-than-expected reading on consumer prices calls into question the Fed's timeline for rate hikes.

Futures on the S&P 500 Index (SPX) are also higher, though the index is pacing for its worst weekly loss since early November. The CBOE Volatility Index (VIX), meanwhile, has pared a portion of its pre-market gains, after spiking north of 17 earlier for the first time since Nov. 9 -- but is still flirting with its biggest weekly advance since December 2015.
 
Continue reading for more on today's market, including:

  • Buy the dip on these 2 travel stocks.
  • This semiconductor stock could soar, if past is prologue. 
  • How call buyers won big on this social media stock.
  • Plus, steep Snap losses; the semiconductor stock scoring price-target hikes; and another retail stock in the red.

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5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 823,551 call contracts traded on Thursday, compared to 727,178 put contracts. The single-session equity put/call ratio jumped to 0.88 -- the highest since April -- and the 21-day moving average rose to 0.66.

  2. Snapchat parent Snap Inc (NYSE:SNAP) reported steeper-than-expected second-quarter losses and lower-than-expected daily active users, which triggered a downgrade to "neutral" from "buy" at Monness, Crespi, Hardt, and price-target cuts from no fewer than seven brokerages -- the largest slice coming from Jefferies, which nearly halved its target to $16. In light of its disappointing earnings, the social media stock is down 12.8% in pre-market trading, and could trade near record lows.

  3. NVIDIA Corporation (NASDAQ:NVDA) reported a second-quarter earnings beat and a 56% jump in quarterly revenue. As such, no fewer than nine brokerages issued price-target hikes on NVDA -- including a hike to $181 from $177 at SunTrust Robinson. However, the semiconductor stock is down 8% in electronic trading, amid concerns about the sales in the autonomous driving and data center businesses. 

  4. Among this week's dismal earnings from retail stores is J C Penney Company Inc (NYSE:JCP) -- now down 22.5% in pre-market trading and headed for a record low -- after reporting steeper-than-expected second-quarter losses. While the department store says it's off to a "strong start" in August, liquidated inventory in 127 recently closed stores helped widened the company's net loss and weakened its gross margins.

  5. Wall Street will digest speeches from Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari, ahead of next week's release of the July Fed meeting minutes.

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Overseas Trading

Major stock indexes in Asia pulled back today, as traders took profits off the table in light of the geopolitical drama between the U.S. and North Korea. Hong Kong’s Hang Seng suffered the biggest loss, shedding 2%, with shares of Tencent suffering sharp losses amid reports the investment company is being investigated by Chinese regulators. Meanwhile, the Shanghai Composite dipped 1.6%, snapping its seven-week winning streak in the process. South Korea’s Kospi couldn’t escape the selling pressure, either, closing down 1.7%. Japanese equity markets were closed for holiday, but there remained strong demand for the yen, which is often viewed as a safe-haven asset.

Stocks in Europe are joining the global equity sell-off. Energy stocks in particular are struggling, as oil prices continue to slide. As it stands now, London’s FTSE 100 is pacing for its lowest weekly close since early May, with the index so far giving back 1.1%. In France, the CAC 40’s 1.1% decline has it trading at its lowest point since late April. Finally, Germany’s DAX has given back 0.2%, flirting with four-month lows of its own. 

 

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