Stocks will try to recover some of last week's losses
U.S. stocks will try to bounce back from last week's pullback, with Dow Jones Industrial Average (DJI) futures trading well above fair value this morning. Traders are preparing for another heavy dose of corporate earnings, though the major releases, such as Apple's (AAPL) quarterly report, aren't due out until later in the week. Still, there's plenty to digest this morning, most notably IBM's $34 billion purchase of software firm Red Hat (RHT).
Continue reading for more on today's market, including:
- Calls were hot on one sinking chip stock.
- Why this video game stock could keep rising.
- Plus, Ford stock gets upgraded; another analyst likes Apple's services business; and 2 bear notes for EA shares.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1.15 million call contracts traded on Friday, compared to 922,536 put contracts. The single-session equity put/call ratio moved up to 0.80, and the 21-day moving average edged up to 0.67.
- Ford Motor Company (NYSE:F) stock is set to open up more than 4%, thanks to an upgrade to "buy" from "hold" at Goldman Sachs, which also lifted its price target to $12 from $9. More broadly, auto stocks could get a bump thanks to a Bloomberg report that Chinese regulators are considering a significant cut in the sales tax on cars. Ford stock has been crushed this year amid a flurry of bearish analyst notes.
- AAPL is also seeing analyst attention, with Jefferies initiating coverage with a "buy" endorsement and $265 price target, citing strength in the company's services business. Not only is the iPhone maker set to release its quarterly results this week, but Wall Street is also preparing for its latest product unveil tomorrow. The FAANG stock is pointed 1.5% higher ahead of the bell.
- The shares of Electronic Arts Inc. (NASDAQ:EA) have been getting buried in recent months, and KeyBanc just responded this morning with a downgrade to "sector weight" from "overweight." Elsewhere, Credit Suisse cut its price target to $127 from $146, though even this is well above EA stock's Friday close of $96.22, its lowest in more than a year.
- Today will bring data on personal income and outlays. Chicago Fed President Charles Evans will speak. An earnings-heavy week will be kicked off with quarterly reports from Akamai Technologies (AKAM), Bloomin' Brands (BLMN), Community Health Systems (CYH), Mondelez International (MDLZ), ON Semiconductor (ON), Transocean (RIG), Tower Semiconductor (TSEM), Weatherford International (WFT), and Wingstop (WING).
Auto Stocks Help European Benchmarks Rise
It was a mostly lower finish for Asian stock markets today, led by a 2.2% drop for China's Shanghai Composite. Losses were fueled by weekend data showing a continued deceleration in profit growth for the industrial sector, along with today's major profit miss from spirits producer Kweichow Moutai. Elsewhere in the region, South Korea's Kospi fell 1.5%, and Japan's Nikkei shed 0.2%. However, Hong Kong's Hang Seng managed to tack on 0.4%, led by a post-earnings pop for banking giant HSBC.
European stocks are on the upswing at midday, despite fresh political uncertainty out of Berlin. Following Sunday's regional election, reports now indicate that German Chancellor Angela Merkel may lose her standing as chair of the Christian Democratic Union (CDU) party. However, healthy gains for auto stocks are boosting investor sentiment, driven by news that China is set to slash auto taxes by half. At last check, the German DAX is up 2%, London's FTSE 100 is 1.9% higher, and the French CAC 40 has advanced nearly 1%.