Dow Futures Soar Over 200 Points on Trade Optimism

General Electric shares are soaring after a major merger deal

Patrick Martin

Managing Editor

May 21, 2018 at 9:16 AM

FITB
CPB
TSLA
GE
DJI

Dow Jones Industrial Average (DJI) futures are red-hot this morning, up more than 200 points amid growing optimism over U.S.-China trade talks. "We are putting the trade war on hold," Treasury Secretary Steve Mnuchin told Fox News on Sunday, after the two countries made significant progress toward a deal on Saturday. Elsewhere, General Electric (GE) is an early Dow standout this morning, with the stock up 2.7% pre-market after an $11.1 billion deal to merge GE Transportation with Wabtec.

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

Carl Icahn is blasting this multi-billion-dollar buyout.
PayPal just took aim at rival Square.
How to use implied volatility when trading options.
Plus, analysts sour on Campbell's stock; Tesla's ambitious new price target; and Fifth Third buys MB Financial.

Stock Futures Chart May 21

5 Things You Need to Know Today

The Chicago Board Options Exchange (CBOE) saw 1.09 million call contracts traded on Friday, compared to 716,839 put contracts. The single-session equity put/call ratio rose to 0.66, and the 21-day moving average remained at 0.62.
Campbell Soup Company (NYSE:CPB) stock is down 1.2% in electronic trading, after BofA-Merrill Lynch downgraded the stock to "underperform" from "neutral," citing the company's transition to a new CEO as the catalyst. In addition, three other brokerages issued price-target cuts this morning. CPB stock fell to a five-year intraday low of $34.09 on Friday, and has shed 28.6% in 2018.
Less than a week after receiving a bearish brokerage note from Morgan Stanley, Tesla Inc (NASDAQ:TSLA) stock is up 1.7% ahead of the bell after Berenberg raised its price target to $500 from $470. In a note, the brokerage firm said it expects gross margins on the Model 3 to positively surprise the Street. Berenberg's ambitious target represents expected upside of more than 80% to TSLA's Friday close at $276.82.
Shares of Fifth Third Bancorp (NASDAQ:FITB) are down 5.4% in electronic trading after agreeing to buy sector peer MB Financial (MBFI) for $4.7 billion in cash and stock. On the charts, Fifth Third stock scored a multi-year high of $34.67 last Tuesday, and has gained nearly 38% in the last 12 months.
The week kicks off with a busy slate of Fed speeches, with Atlanta Fed President Raphael Bostic, Philadelphia Fed President Patrick Harker, and Minneapolis Fed President Neel Kashkari all scheduled to speak. Pure Storage (PSTG) will report earnings.

Trade Talks Boost Asia; Italy Bond Yields Surge

Asian markets finished the day modestly higher, as U.S.-China trade war worries eased over the weekend. After a roller coaster session, Japan's Nikkei ended 0.3% higher on a weakening yen. Strength in tech stocks pushed Hong Kong's Hang Seng up 0.6%, China's Shanghai Composite gained 0.7%, and South Korea's Kospi picked up 0.2%.

Stocks in Europe are higher at midday, following suit with their Asian counterparts -- even as Italian bond yields spike amid concerns over the coalition government's spending-heavy budget plan. London's FTSE 100 is up 0.6% and pacing towards a record close, while France's CAC 40 is 0.5% higher. Markets in Germany are closed for holiday.

Follow @Schaeffers

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!