New trade tensions with China are keeping stocks in check
U.S. stock futures are trading around fair value today, as markets brace for a busy day on Wall Street. Dow Jones Industrial Average (DJI) futures are staring at a lower open, despite an impressive earnings beat from Apple (AAPL). S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are cautiously higher, however, even amid reports the Trump administration is exploring a 25% tariff on $200 billion in Chinese goods. China responded by warning that "U.S. pressure and blackmail won't have an effect," and vowed to take countermeasures.
Elsewhere, investors are preparing for the Fed's policy decision, although a rate hike is not anticipated. On the economic front, the ADP's private-sector payrolls report roared past expectations, with the U.S. adding 219,000 jobs in July, compared to the 185,000 estimate.
Continue reading for more on today's market, including:
- Target these stocks after the Nasdaq sell-off, says Schaeffer's Senior Quantitative Analyst Rocky White.
- 2 Apple suppliers preparing for earnings.
- Analyst: This penny stock could triple.
- Plus, Third Point circles Campbell's; Dropbox stock gets a critical upgrade; analysts cheer upbeat Pandora earnings.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 921,499 call contracts traded on Tuesday, compared to 637,783 put contracts. The single-session equity put/call ratio fell to 0.69, while the 21-day moving average remained at 0.63.
- Campbell Soup Company (NYSE:CPB) stock is up 4.8% in electronic trading, amid reports that hedge fund Third Point has taken a more than $300 million stake in the food processing name. Further, sources say activist Daniel Loeb is trying to get controlling shareholders to put the company up for sale. In late June, CPB stock gapped higher on rumors of Kraft Heinz (KHC) interest. Campbell stock has added 25% since its June 7 bottom of $32.63, closing Tuesday at $40.90.
- Dropbox Inc (NASDAQ:DBX) stock is up 3.1% ahead of the bell, after Jefferies upgraded the software name to "buy" from "hold." The analyst in coverage believes the shares are attractively valued, and said tailwinds from 2017 developments are yet to come. Dropbox stock fell to a record low of $26.61 yesterday, extending its losing streak to four days.
- Shares of Pandora Media Inc (NYSE:P) are up 13.6% in electronic trading, after the music streaming company reported a smaller-than-expected second-quarter loss. Revenue beat forecasts as well, thanks to improving ad metrics and a surge in paid subscribers. In response, RBC upgraded Pandora stock to "outperform" from "sector perform," and six other brokerages chimed in with price-target hikes. P stock has been hit hard by the recent tech sell-off, down nearly 17% in the past week.
- July vehicle sales will roll in today, while the Markit purchasing managers manufacturing index (PMI), the Institute for Supply Managers (ISM) manufacturing index, construction spending, and weekly crude inventories update are also expected. The earnings lineup runs deep. Among those set to report are Chesapeake Energy (CHK), Express Scripts (ESRX), FireEye (FEYE), Fitbit (FIT), Garmin (GRMN), Humana (HUM), Marathon Oil (MRO), Molson Coors Brewing (TAP), Super Micro Computer (SMCI), Square (SQ), Tesla (TSLA), TripAdvisor (TRIP), U.S. Steel (X), Wynn Resorts (WYNN), and Yelp (YELP).
Trade Tensions Weigh on China Stocks
Stocks in Asia finished mixed, as investors digested Apple's impressive earnings and its impact on regional suppliers. South Korea's Kospi saw a 0.5% lift, while Japan's Nikkei closed 0.9% higher on the back of a weaker yen. However, Hong Kong's Hang Seng finished 0.9% lower, while China's Shanghai Composite took the biggest hit and shed 1.8% following the latest round of tariff news.
Meanwhile, European markets are lower at midday, as resurfaced trade tensions and a fresh round of earnings weigh on investor sentiment. London's FTSE 100 is 1.2% lower following a disappointing report from U.K. retailer Next, while France's CAC 40 is down 0.09%, and Germany's DAX is suffering a 0.3% setback.