Trade War Threats Sink Stock Futures

China's Ministry of Commerce vowed to retaliate against increased tariffs

Managing Editor
Aug 2, 2018 at 9:11 AM
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U.S. stock futures are pointed significantly lower this morning, as worsening trade relations between the U.S. and China spook investors. In response to the Trump administration's threats to increase tariffs on Chinese goods to 25%, China's Ministry of Commerce said the country is "fully prepared and will have to retaliate to defend the nation's dignity and the interests of the people." Dow Jones Industrial Average (DJI) futures are signaling a more than 150-point drop, while S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are lower as well. Elsewhere, earnings season continues to chug along, with Tesla (TSLA) a big winner this morning. 

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

  • This Netflix rival is ripe for a rebound.
  • 2 Chinese internet stocks that got slammed yesterday.
  • Options traders are flocking to GoPro stock ahead of earnings.
  • Plus, the restaurant stock set to nosedive; Nike stock earns a lofty price target; and Starbucks teams up with Alibaba.

Stock Futures Chart Aug 2

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 972,475 call contracts traded on Wednesday, compared to 653,474 put contracts. The single-session equity put/call ratio fell to 0.67, while the 21-day moving average remained at 0.63.
  2. Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) stock is down 21.8% in electronic trading, after the restaurateur reported disappointing preliminary second-quarter earnings and cut its full-year forecast. As a result, Raymond James cut its rating on RRGB stock to "market perform" from "outperform," and Jefferies and Stifel slashed their price targets to $50 and $45, respectively. RRGB hit an annual low of $45.30 yesterday, and could soon be in territory not charted since 2013.
  3. Nike Inc (NYSE:NKE) stock is up 0.8% ahead of the bell, after Morgan Stanley initiated coverage on the Dow stock with an "overweight" rating and a $88 price target. The analyst in coverage likes Nike's transition to retail technology and is impressed with its growing global activewear market. The new price target represents an 8.6% premium to NKE's record high of $81 set on June 29. 
  4. Shares of Starbucks Corporation (NASDAQ:SBUX) are up 1% in electronic trading, after the coffee giant confirmed that it inked a partnership with Alibaba (BABA) to deliver its products in Chinese cities. SBUX stock has shed 10% in 2018, mostly due to a post-earnings bear gap in mid-June. 
  5. Weekly jobless claims and factory orders will be in focus today. Earnings from DowDuPont (DWDP), Activision Blizzard (ATVI), Aetna (AET), Becton Dickinson (BDX), GoDaddy (GDDY), GoPro (GPRO), MGM Resorts International (MGM), Nu Skin Enterprises (NUS), Pinnacle Foods (PF), Shake Shack (SHAK), Tableau Software (DATA), and Take-Two Interactive Software (TTWO) will be released.

stock market news august 2

Trade Tensions Sink Asia; BoE Decision Drags Europe Lower

Trade war tensions weighed on Asian markets today, as all major indexes closed in the red. Hong Kong's Hang Seng took the biggest hit, extending its daily losing streak to three with a 2.2% loss. Meanwhile, China's Shanghai Composite fell 2%, South Korea's Kospi let go of 1.6%, and Japan's Nikkei shed 1% on the back of weak corporate earnings.

European markets are lower in afternoon trading as investors digest the Bank of England's (BoE) unanimous decision to hike interest rates and heated tariff threats between the U.S. and China. London's FTSE 100 is down 1.1%, France's CAC 40 is suffering a 0.7% loss, and the German DAX is 1.6% lower.


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