Dow Eyes Third Straight Gain Amid Election Day Relief

A divided Congress hopes to check Trump's trade rhetoric

by Patrick Martin

Published on Nov 7, 2018 at 9:10 AM

Futures on the Dow Jones Industrial Average (DJI) are higher this morning, up over 150 points and eyeing a third straight win, as investors digest the midterm election results from last night. Election Day brought little that surprised investors, as Democrats took the House and Republicans maintained control of the Senate. Blue chips such as Caterpillar (CAT) are up on optimism that House Democrats can now reel in President Donald Trump's trade rhetoric.

S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are also confidently higher, with the latter getting a boost from Amazon.com (AMZN) -- a frequent target of Trump. Investors will now turn their attention to the two-day Federal Open Market Committee (FOMC), which begins later today, though the Fed is expected to stand pat on rates.

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

  • Pull the plug on this retail stock for 2018. 
  • Buyout buzz fueled these 2 software stocks.
  • Disney rumors drove Workday stock higher. 
  • Plus, analyst sets a lofty goal for TGT; ETSY scores a big earnings win; and Twilio stock is set to soar.

Stock Futures Chart Nov 7

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 751,979 call contracts traded on Tuesday, the lowest since July 5. This is compared to 500,980 put contracts, the lowest since July 6. The single-session equity put/call ratio rose to 0.67, and the 21-day moving average remained at 0.67.
  2. Target Corporation (NYSE:TGT) stock is up 2.3% in electronic trading, after Cowen upgraded the retailer to "outperform" from "market perform," while boosting its price target to $100 from $90. This would represent uncharted territory for TGT, which nabbed a record high of $90.39 on Sept. 10. The shares have pulled back some since, but have found support at their 100-day moving average.
  3. Etsy Inc (NASDAQ:ETSY) stock is up 13.2% ahead of the bell, after the e-tailer reported a third-quarter earnings and revenue beat, while also upping its fiscal-year forecast. RBC and Stifel have responded with price-target hikes, to $52 and $50, respectively. Should today's price action hold, ETSY would be breaking out of congestion under the $45 level, and would now have more than doubled in value in 2018. 
  4. The shares of Twilio Inc (NYSE:TWLO) are up 16.9% in electronic trading, after the cloud name reported third-quarter earnings and revenue that beat analyst expectations. Canaccord Genuity issued a price-target hike in response, to $90 from $80. Twilio stock, which has a history of upbeat post-earnings reactions, has now more than tripled in 2018.
  5. Today, traders will digest the MBA mortgage index, the weekly crude inventories report, and the Fed's consumer credit report. Home entertainment names Roku (ROKU) and DISH Network (DISH) will step into the earnings confessional, as will 21st Century Fox (FOXA), Ctrip.com (CTRP), Dean Foods (DF), Humana (HUM), Keurig Dr Pepper (KDP), Marathon Oil (MRO), Monster Beverage (MNST), Qualcomm (QCOM), Square (SQ), Take-Two Interactive Software (TTWO), Sunoco (SUN), TripAdvisor (TRIP), and Wynn Resorts (WYNN).

stock market news nov 7

European Stocks Higher After U.S. Elections

It was a mixed session for stocks throughout Asia, with many traders seemingly taking a wait-and-see approach as the results of U.S. midterm elections rolled in. In China, the Shanghai Composite fell 0.7%, while Hong Kong's Hang Seng managed a slim 0.1% -- paring most of its intraday gains after hitting a two-month high earlier in the session. Elsewhere in the region, Japan's Nikkei gave back 0.3%, and South Korea's Kospi slipped 0.5%.

European benchmarks are higher at midday, as election results in the U.S. fell in line with expectations. Banks and retail stocks are some of the biggest gainers, boosted by a well-received Supreme Court ruling in Spain and round of upbeat earnings reports, respectively. At last check, London's FTSE 100 and the French CAC 40 are each up 1.3%, while the German DAX is 0.9% higher.

Don't Sweat the Square Stock Pullback
SQ has still more than doubled in 2018 despite recent struggles
Apple Supplier Stock On Sale
Pullbacks to the 320-day have been buy signals in the past
JD Stock Aims to End Earnings Slump
JD shares are hovering above recent lows ahead of earnings
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