Stock Futures Dragged Lower By Trade Woes

The deadline for a trade deal with Canada is today

Managing Editor
Aug 31, 2018 at 9:17 AM
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Dow Jones Industrial Average (DJI) futures are below fair value this morning, shaken up by strained U.S. trade relations, amid reports that President Donald Trump wants to proceed with tariffs on $200 billion worth of Chinese goods as soon as next week. Adding to the trade woes were comments from Trump that indicated he may pull the U.S. out of the World Trade Organization (WTO), and Trump on Thursday rejected a European Union (EU) offer to scrap auto tariffs. Investors will also be keeping their eye on trade talks with Canada, where a deadline today looms. Nevertheless, the Dow is heading toward weekly and monthly wins. 

S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are slightly lower as well this morning, although both indexes are heading toward their fifth straight monthly win, and the latter is on track for its best month since January. Elsewhere, Coca-Cola (KO) made waves on the M&A front, after announcing plans to purchase coffee name Costa for $5.1 billion. 

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

  • 2 hot tech stocks with cheap options.
  • The FAANG stock set for its best month since 2009.
  • 2 retail stocks that could shine in September.
  • Plus, analysts toast Lululemon's earnings beat; Starbucks stock dips on Coca-Cola news; and Big Lots reports subpar earnings again.

Stock Futures Chart Aug 31

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 1.10 million call contracts traded on Thursday, compared to 645,867 put contracts. The single-session equity put/call ratio climbed to 0.58, and the 21-day moving average remained at 0.61.
  2. Lululemon Athletica Inc. (NASDAQ:LULU) stock is up 10.8% in electronic trading -- set to extend its string of positive earnings reactions -- after the athleisure retailer reported second-quarter earnings and revenue that exceeded analyst expectations. No fewer than nine price-target hikes have ensued, including to $200 from $150 at Barclays. LULU is on track to open at a record high, and had more than doubled in the last 12 months, as of last night's close at $137.
  3. In response to Coca-Cola's Costa deal, Starbucks Corporation (NASDAQ:SBUX) stock is down 2.1% ahead of the bell. Since bottoming at a nearly three-year low of $47.37 on June 28, Starbucks stock has fought back to add 12%, closing yesterday at $53.10. However, should today's price action pan out, the shares could breach their 30-day moving average for the first time since July. 
  4. Shares of Big Lots, Inc. (NYSE:BIG) are down 9.8% in electronic trading -- likely to the delight of several BIG short sellers -- after the discount retailer reported second-quarter earnings and revenue that fell short of Wall Street estimates. In addition, the company slashed its full-year guidance. BIG shares are on track to trade below their 80-day moving average for the first time in over a month. 
  5. The Chicago purchasing managers index (PMI), consumer sentiment data, and Baker-Hughes rig count is expected today. There are no earnings of note.

stock market news aug 31

Tariff Threats Weigh On Asian Markets, European Stocks

Stocks in Asia closed mostly lower, as investors reacted to reports that President Trump could go ahead with a new round of Chinese tariffs. China's Shanghai Composite took a loss of 0.5%, Japan's Nikkei snapped its eight-day streak to close down 0.01%, and Hong Kong's Hang Seng shed 1%, after tech giant Tencent plunged following an announcement that Chinese officials plan to increase regulations on video games. South Korea's Kospi, on the other hand, managed a healthy gain of 0.7%.

Global trade tensions are pushing European markets lower at midday. Also in focus in the region is Coca-Cola’s $5.1 billion purchase of European coffee chain Costa, which has shares of the latter's parent company Whitbread surging. At last check, London's FTSE is down 0.4%, Germany's DAX is 0.8% lower, and France's CAC 40 is off 1.1%.

 

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