Dow Futures Down Big with Apple

A huge healthcare M&A deal is adding to a busy morning on Wall Street

by Josh Selway

Published on Jan 3, 2019 at 9:09 AM

Dow Jones Industrial Average (DJI) futures are trading below fair value, as Wall Street prepares for sharp losses from blue-chip tech giant Apple (AAPL). The company yesterday lowered its quarterly sales forecast due to weak iPhone demand in China -- adding to concerns about a slowdown in the global economy. As such, a handful of Apple suppliers are also swimming in red ink ahead of the bell. Investors are also digesting major M&A news in healthcare, after Bristol-Myers Squibb (BMY) said it'll buy cancer drug specialist Celgene (CELG) for $74 billion, as well as this morning's jobs data. Specifically, the ADP employment report for December blew past estimates, while weekly jobless claims came in higher than expected.

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

stock futures jan 3

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 661,620 call contracts traded on Wednesday, compared to 441,647 put contracts. The single-session equity put/call ratio moved up to 0.67, and the 21-day moving average ticked up to 0.73.
  2. AAPL shares are signaling a nearly 8% decline at the open, prompting a number of bearish analyst notes, including a downgrade to "hold" from "buy" at Jefferies. Suffice it to say, D.A. Davidson's recent bull call isn't looking great. The stock's losses are set to spill over into the chip space, where suppliers Cirrus Logic, Inc. (NASDAQ:CRUS) and Skyworks Solutions Inc (NASDAQ:SWKS) are pointed sharply lower, too, potentially hindering the latter's chances of another strong first quarter.
  3. First Solar, Inc. (NASDAQ:FSLR) was upgraded to "buy" at Goldman Sachs, as part of the firm's improved outlook on the broader U.S. solar industry. FSLR shares had a horrible final half of 2018, losing 37% since the end of May. The stock is up 3.4% in pre-market trading.
  4. Dow component Visa Inc (NYSE:V) also received positive analyst attention, with Mizuho naming the equity its top pick among payment processors for 2019. This comes just days after the company's purchase of Earthport.
  5. Data on motor vehicle sales, the Institute for Supply Management (ISM) manufacturing index, construction spending, and the Fed's balance sheet are also on today's economic calendar

stock market news jan 3

Apple News Sinks Global Tech Stocks

Asian stocks closed lower today, with tech stocks dragging on Apple's weak revenue forecast. Stiff losses for Samsung Electronics and SK Hynix sent South Korea's Kospi down 0.8%, while Hong Kong's Hang Seng slipped 0.3% as Apple suppliers AAC Technologies and Sunny Optical sold off. Elsewhere, China's Shanghai Composite finished fractionally lower. Japan's Nikkei remained closed for holiday.

European markets are trading in negative territory at midday, as sinking tech shares turn up the heat. Among notable losers are chip stocks AMS and Dialog Semiconductors, down 19% and 8%, respectively, at last check, and Frankfurt-listed Apple shares, which have plunged nearly 9%. The German DAX is off 0.9%, the French CAC 40 is 0.8% lower, and London's FTSE 100 has shed a modest 0.04%, as gains in the retail sector offset broader headwinds.


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