Weak Chinese Data Pressures Stock Futures

Chinese industrial production and retail sales data missed the mark last month

Karee Venema
Dec 14, 2018 at 9:21 AM
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Fear is spiking this morning, as a dismal batch of economic data out of China sparks concerns over the impact of trade tensions on the global economy. This is offsetting news Beijing agreed to suspend auto tariffs for 90 days beginning Jan. 1, as well as a much stronger-than-expected 0.9% surge in core U.S. retail sales last month. At last check, Dow Jones Industrial Average (DJI) futures are trading more than 240 points below fair value, while the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) are also bracing for sharp drops at the open.

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

  • This logistics stock is "uninvestible," according to Spruce Capital.
  • XLF options traders bet on a January bounce for bank stocks.
  • Options traders reacted quickly to General Electric stock's big day.
  • Plus, gross margin woes weigh on Costco; Shopify's stock offering disappoints; and Goldman says sell this Dow stock.

us stock index futures fair value on dec 14

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 668,389 call contracts traded on Thursday, compared to 499,556 put contracts. The single-session equity put/call ratio jumped to 0.75, and the 21-day moving average remained at 0.70.
  2. Costco Wholesale Corporation (NASDAQ:COST) reported fiscal first-quarter earnings of $1.73 per share on $35.07 billion in revenue, which was more than analysts were expecting. However, continued pressure on gross margins -- which fell 50 basis points in the three-month period due to wage hikes and higher gas prices -- has COST shares trading down 4.1% ahead of the bell, set to test short-term support in the $220 region.
  3. Shopify Inc (NYSE:SHOP) priced a public offering of 2.6 million Class A shares at $154 each, a discount to last night's close at $161.06. In reaction, shares of the Canadian e-commerce concern are down 7.5% in electronic trading -- putting their four-day win streak at risk.
  4. Goldman Sachs downgraded Walgreens Boots Alliance Inc (NASDAQ:WBA) to "sell" from "neutral," and slashed its price target to $68 from $73 -- a more than 17% discount to Thursday's close at $82.32 -- citing a challenging market space for retail pharmacies. WBA stock topped out at a 19-month high of $86.31 earlier this month, but has since pulled back to familiar support at its 30-day moving average. The Dow stock is set to open the session down 3.9%.
  5. Industrial production data and business inventories are on tap. Next week, attention will be focused on the December Fed meeting.

stocks in the news december 14

Global Stocks Sink on China Alarm Bells

Asian stocks took a hit today after disappointing economic data out of mainland China. Beijing said industrial production grew by 5.4% in November, lower than the 5.9% estimate, and marking the slowest pace since early 2016. In addition, retail sales data was weaker than anticipated. Separately, the Bank of Japan released its tankan survey, which showed the outlook among large Japanese manufacturers growing more downbeat in the months ahead due to trade frictions. China's Shanghai Composite gave back 1.5%, Hong Kong's Hang Seng lost 1.6%, South Korea's Kospi shed 1.3%, and Japan's Nikkei paced the losers with a 2% drop.

Over in Europe, markets are slumping amid concerns of slowing global growth. Basic resource stocks are feeling the heat the most, after China's subpar economic data. Auto stocks are also struggling, after European car sales for November fell by 8.1%. London's FTSE 100 and the German DAX are down 0.7%, at last check, while the French CAC 40 is off by 1%.


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