Dow Futures Rise as Cisco, Walmart Earnings Offset New Huawei Tensions

Dow stocks Cisco and Walmart are set to rally at the open

Managing Editor
May 16, 2019 at 9:26 AM
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Dow Jones Industrial Average (DJI) futures are pointed toward a positive open, as the latest quarterly earnings reports from Dow stocks Walmart (WMT) and Cisco (CSCO) exceeded analysts' expectations. Both WMT and CSCO are poised to open about 3% higher, offsetting a fresh round of U.S.-China trade tensions after President Donald Trump signed an executive order to ban the use of telecom gear from sources deemed to pose a national security risk -- a move intended to target Huawei. Meanwhile, investors are also digesting stronger-than-forecast reports on weekly jobless claims and housing starts.

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

  • 3 small-cap drug stocks to watch.
  • It's time to buy calls on this red-hot defense stock.
  • Beyond Meat options volume soars to new heights.
  • Plus, Cisco weighs in on its trade war exposure; Fred's shutters a fresh round of stores; and South Korea stocks take a dive on Huawei-related selling.

over futures may 16

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 889,012 call contracts traded on Wednesday, compared to 681,752 put contracts. The single-session equity put/call ratio rose to 0.77, while the 21-day moving average moved up to 0.64.
  2. Fred's, Inc. (NASDAQ:FRED) is down 8.4% in electronic trading, after the discount chain announced its plan to close an additional 104 underperforming stores by the end of June, while simultaneously entering a forbearance agreement with its lenders. Another drop for FRED today would add to the stock's post-earnings bear gap from earlier this month, with the shares now lower by 68.8% year-to-date.
  3. Just one day after announcing fiscal fourth-quarter revenue that surpassed estimates, Chinese tech giant Alibaba Group Holding Ltd (NYSE:BABA) this morning has received no fewer than six price-target hikes and one cut from analysts. Raymond James handed over the sole price-target cut to a still-lofty $280, while Mizuho doled out the loftiest of the six hikes with a boost to $225 from $215. BABA is up 29.6% year-to-date, and closed Wednesday at $177.60.
  4. Blue-chip tech name Cisco Systems, Inc. (NASDAQ:CSCO) is also seeing some post-earnings analyst action, after the company last night posted a fiscal third-quarter beat, and said it has "greatly reduced" its supply chain exposure to the U.S.-China trade skirmish. So far, five analysts have hiked their price targets on CSCO, including a raise to $65 from $62 out of Cowen. CSCO stock is up 2.9% in early trading, getting ready to add to its 21% year-to-date lead.
  5. The Fed balance sheet and the Philadelphia Fed business outlook survey are all due out.The earnings ring will contain Applied Materials (AMAT), Baidu (BIDU), iQIYI (IQ), NVIDIA (NVDA), Pinterest (PINS), and Wix.com (WIX). 

stock market news may 16

South Korea Chip Stocks Sink

South Korean stocks ended sharply lower in mixed Asian trade today. The Kospi closed down 1.2% on widespread weakness in exporters and chip stocks after the Department of Commerce on Wednesday moved to restrict Huawei Technologies from doing business in the U.S. market. Elsewhere in the region, Japan's Nikkei fell 0.6%, Hong Kong's Hang Seng edged up 0.02%, and China's Shanghai Composite rose 0.6%.

Trade headlines are also driving European stocks at midday, with bulls taking the lead after the Trump administration signaled it would delay auto tariffs by up to six months. At last check, the German DAX has advanced 0.5%, while the French CAC 40 and London's FTSE 100 are each up 0.2%.

 

 

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