Dow Set to Break 4-Day Win Streak as Blue-Chip Earnings Disappoint

Jobless claims came in below analysts' expectations, clearing the way for the Fed to unwind its bond holdings

Aug 17, 2017 at 9:20 AM
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The Dow Jones Industrial Average (DJIA) is set to break its four-day win streak, after closing back above the 22,000 level yesterday. U.S. stock futures are heading lower today after poorly received earnings from Dow stocks Wal-Mart Stores Inc (NYSE:WMT) and Cisco Systems, Inc. (NASDAQ:CSCO), and weighing a stronger-than-forecast report on jobless claims that could prompt the Fed to begin unwinding its multi-trillion dollar bond portfolio as soon as September. Later today, Wall Street will hear speeches from Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari.

Continue reading for more on today's market, including:

  • These speculative players nailed the post-earnings pullback in WMT.
  • Why short sellers might be buying calls on beaten-down Transocean stock.
  • Call buyers bet on an extended breakout for this healthcare stock.
  • Plus, China's largest e-commerce firm is set to open at a record high; and two retailers in retreat.

Futures Chart August 17

5 Things You Need to Know Today
  
  1. The Chicago Board Options Exchange (CBOE) saw 816,057 call contracts traded on Wednesday, compared to 507,342 put contracts. The single-session equity put/call ratio fell to 0.62, and the 21-day moving average remained at 0.68.
  2. Alibaba Group Holding Ltd (NYSE:BABA) reported better-than-expected fiscal first-quarter earnings and quarterly revenue that grew 56%. The Chinese e-commerce firm is up 4.9% in electronic trading and set to open at a record high.
  3. Down 7.7% in pre-market trading is L Brands Inc (NYSE:LB), after the Victoria's Secret parent reported a decline in second-quarter same-store sales and lowered its full-year earnings forecast range. As such, Deutsche Bank, Wells Fargo, and Instinet all cut their price targets on the stock -- with the latter two slashing their targets by $5 each to $45 and $38, respectively.
  4. Worse-than-expected second-quarter earnings has Vipshop Holdings Ltd (NYSE:VIPS) down 9.1% in electronic trading, and sparked price-target cuts from Deutsche Bank and Nomura. The Chinese online discount retailer did see its active customer base grow 22% year-over-year, and its total orders increase by 23%.
  5. The Philadelphia Fed business outlook survey and industrial production data will be released today. Applied Materials (AMAT), Buckle (BKE), and Gap (GPS) will report earnings

Stocks in the news today August 17 2017

Overseas Trading

It was a mixed bag for Asian stock markets today. In front of the pack was China’s Shanghai Composite, up 0.7% thanks to strong gains from industrial stocks. However, Hong Kong’s Hang Seng struggled to gain momentum, even with heavyweight Tencent rallying after earnings, with the index closing down 0.2%. The Nikkei also settled in the red, shedding 0.1%, after Japanese exports for July rose for an eighth straight month, matching expectations in the process. South Korea’s Kospi, meanwhile, added 0.6%.

In Europe, major benchmarks are under pressure halfway through the day. Traders are digesting the minutes from the most recent central bank meetings in the U.S. and Europe, and as a result, bank stocks are underperforming and the euro is under pressure. London’s FTSE 100 was last seen down 0.4%, while France’s CAC 40 and Germany’s DAX were sporting respective losses of 0.1% and 0.05%.

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