Chip Sector Weakness Weighs On Stock Futures

All three benchmarks are heading toward weekly losses

Patrick Martin
Nov 16, 2018 at 9:12 AM
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Despite snapping its losing streak yesterday, futures on the Dow Jones Industrial Average (DJI) are set to stumble into the weekend, down more than 150 points. S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are lower as well, with the latter under particular pressure from the sinking semiconductor sector, after chipmaker Nvidia (NVDA) reported weaker-than-expected revenue and guidance. All three indexes are heading toward weekly losses. Elsewhere, investors continue to nervously eye the Brexit situation in Britain, after Prime Minister Theresa May pledged her commitment to seeing her country through the divorce with the European Union (EU). 

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

  • This gold stock just flashed a big "buy" signal.
  • Apple tailwinds sent this chip stock to the top of the S&P 500 yesterday.
  • Options traders piled on Switch stock after a rare upgrade.
  • Plus, Sonos cheers slim earnings loss; AMAT buried by weak guidance; and Oppenheimer downgrades KORS.

Stock Futures Chart Nov 16

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 900,049 call contracts traded on Thursday. This is compared to 659,941 put contracts. The single-session equity put/call ratio fell to 0.73, and the 21-day moving average remained at 0.69.
  2. Sonos Inc (NASDAQ:SONO) stock is up 19.7% in electronic trading, after the consumer electronics name reported a fiscal fourth-quarter earnings loss that was smaller than expected, and topped quarterly revenue estimates. SONO gapped lower back in September following its first quarterly report, and fell to a record low of $11.78 on Oct. 29. Now, the shares are on track to trade above their $15 initial public offering (IPO) price for the first time since early October.
  3. One of the chip stocks getting gashed is Applied Materials, Inc. (NASDAQ:AMAT), down 9.5% ahead of the bell, after the company's chip revenue forecast for the first quarter disappointed analysts. Six brokerages have issued price-target cuts in response, including to $38 from $43 at RBC. AMAT, which is no stranger to bear notes, is set to open near its Oct. 29 annual low of $30.53.
  4. Fresh off a post-earnings bear gap last week, Michael Kors Holdings Ltd (NYSE:KORS) is down 1.9% in electronic trading today, after Oppenheimer downgraded the retailer to "perform" from "outperform." The analyst in coverage cited inventory management and integration of the Versace brand as upcoming challenges. KORS is already staring at a 25% deficit for 2018, and touched an annual low of $46.40 yesterday. 
  5. Industrial production data, Treasury International Capital (TIC) data, and the Baker-Hughes rig count are due today. Chicago Fed President Charles Evans will speak in the morning. Viacom (VIAB) will be the last notable earnings report of the week. 

buzz stocks nov 16

Asian Stocks Finish Higher; Europe Lower Amid Brexit Drama

It was a mostly higher finish in Asia following a wild trading session on Wall Street. China's Shanghai Composite outpaced its peers, adding 0.4%, while Hong Kong's Hang Seng gained 0.3% and South Korea's Kospi tacked on 0.2%. Japan's Nikkei, on the other hand, gave back 0.6% amid pressure from sinking chip stocks.

European stocks are in the red at midday as Brexit uncertainty weighs on the banking sector. Media stocks are outperforming, though, on a positive earnings reaction for French entertainment giant Vivendi. At last check, London's FTSE 100, the French CAC 40, and the German DAX are all flirting with 0.7% losses.


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