Dow futures are trading roughly 80 points above fair value
U.S. stock futures are signaling another rally, putting the Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) on pace for another record-breaking session. The upbeat approach comes as Congress is expected to begin voting on tax reform as early as today, with the new tax bill now widely expected to pass. Meanwhile, traders are digesting November housing starts, which topped expectations, and later will monitor a speech from Minneapolis Fed President Neel Kashkari.
Continue reading for more on today's market, including:
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1 million call contracts traded on Monday, compared to 521,768 put contracts. The single-session equity put/call ratio declined to 0.50, while the 21-day moving average stayed at 0.58.
- Shares of online automotive marketplace Cars.com Inc (NYSE:CARS) are up 9.4% in pre-market trading, thanks to news hedge fund Starboard Value LP has taken a 9.9% stake in the company. Starboard reportedly sees the stock as undervalued and thinks the market is wrongly betting against it.
- Truck manufacturer Navistar International Corp (NYSE:NAV) is set to jump 9% at the open, after the company topped top- and bottom-line expectations in its fiscal fourth-quarter earnings report. NAV stock was already up 34.5% year-to-date coming into today, finding support from its 80-day moving average since pulling back from October's five-year high of $45.47.
- Another earnings winner is Darden Restaurants, Inc. (NYSE:DRI). The Olive Garden parent posted better-than-expected fiscal second-quarter results and lifted its full-year forecast. DRI stock is set to add 2.3% at the open.
- Also, FedEx (FDX), Micron Technology (MU), and Red Hat (RHT) will report earnings.
It was a mixed finish in Asia today, with a record-setting close on Wall Street failing to boost investor sentiment in Japan and South Korea. Specifically, Japan's Nikkei fell 0.2% as construction stocks sold off after Tokyo prosecutors raided several companies amid a maglev train line bid-rigging probe, while South Korea's Kospi gave back 0.1%. On the flip side, rising tech and bank stocks helped boost China's Shanghai Composite 0.9%, while Hong Kong's Hang Seng added 0.7% as casino shares rallied.
European stocks are trading on both sides of breakeven at midday, as investors keep a cautious eye trained on the U.S. ahead of today's expected House vote on the Republican tax bill. Traders are also digesting Germany's weaker-than-expected Ifo business climate index, which fell in December from November's record high, and a big rally for U.K.-based chipmaker Dialog Semiconductor -- which is surging after China's Tsinghua Unigroup increased its stake in the Apple supplier. Most recently, the German DAX is down 0.08%, while the French CAC 40 is flirting with a 0.06% loss. London's FTSE 100, meanwhile, is up 0.2%.