Dow Futures Gain on Bank Strength; Nasdaq Cools Off

Investors are anticipating a Fed rate hike next week

Managing Editor
Jun 7, 2018 at 9:14 AM
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Futures on the Dow Jones Industrial Average (DJI) are signaling a positive open following yesterday's big rally, driven by a continued push higher from financial stocks. Banks are rising alongside bond yields, as investors continue to price in expectations for a tighter monetary policy ahead of next week's Fed meeting. However, following a string of record closing highs, the Nasdaq-100 Index (NDX) looks set to take a breather today.

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

  • 3 popping penny stocks.
  • Inside the U.S. Steel rally.
  • Option bulls blitzed Under Armour stock.
  • Plus, Buffett and Dimon push to end an earnings tradition; AT&T stock suffers a downgrade; and Johnson & Johnson's $2.7 billion deal.

2 Dow Futures Chart June 7

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Wednesday, compared to 596,175 put contracts. The single-session equity put/call ratio rose to 0.53, while the 21-day moving average stayed at 0.58.
  2. On CNBC's Squawk Box today, Berkshire Hathaway boss Warren Buffett and JPMorgan Chase CEO Jamie Dimon argued for an end to the tradition of companies providing quarterly earnings forecasts. Dimon explained that the pressure to meet guidance "can often put a company in a position where management... feels obligated to deliver earnings and therefore may do things that they wouldn't otherwise have done."
  3. Jefferies downgraded AT&T Inc. (NYSE:T) to "hold" from "buy" and cut its price target to $35 from $40, citing concerns over margin pressure in the company's entertainment segment. AT&T stock is down 0.4% in electronic trading, and as of last night's close at $33.38, had shed 14% year-to-date.
  4. Johnson & Johnson (NYSE:JNJ) is fractionally higher ahead of the open, after the pharmaceutical concern late Wednesday said Fortive (FTV) has launched a bid to buy its advanced sterilization products division for $2.7 billion. JNJ has had a rough year on the charts, last night closing down 12.1% year-to-date.
  5. Following an early report that showed a surprise drop in weekly jobless claims, traders will hear updates later today about the Fed's consumer credit report and balance sheet. Broadcom (AVGO), Hovnanian Enterprises (HOV), Stitch Fix (SFIX), and Zumiez (ZUMZ) are reporting earnings.

stock market news june 7

Bank Stocks Push Global Markets Higher

Stocks throughout Asia closed today’s session mostly higher. Japanese equities led the way, guiding the Nikkei to a 0.9% win. Automakers outperformed as the yen weakened against the dollar, and bank stocks also gained, echoing the move out of their U.S. counterparts from yesterday. Hong Kong’s Hang Seng closed with a 0.8% advance -- its sixth straight positive finish -- though China’s Shanghai Composite fell 0.2%. South Korea’s Kospi, meanwhile, added 0.7%.

Bank stocks are also on the rise today in Europe, a big reason the major benchmarks are posting positive returns at the halfway point. This comes on the heels of reports that the European Central Bank (ECB) could begin discussing how to wind down its stimulus program. In London, the FTSE 100 is up 0.4%, despite an apparent technical issue that caused a delayed opening in trading, as well as continued strength from the pound. Germany’s DAX is also gaining, up 0.2%, even though industrial orders for April were weak, while France’s CAC 40 is up 0.2%, as well.

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