Dow Futures Slide with 10-Year Treasury Yield

Disney fell short of profit and revenue expectations

by Patrick Martin

Published on Aug 7, 2019 at 9:24 AM

Dow Jones Industrial Average (DJI) futures are trading nearly 200 points below fair value, as yesterday's optimism over U.S.-China trade talks fades. Ten-year and 30-year Treasury yields fell to their lowest levels since 2016 earlier, while gold futures tagged six-year highs -- and traders are also weighing a disappointing fiscal third-quarter earnings report from Disney (DIS) this morning. DIS stock is down more than 5% ahead of the open, with the media giant missing top- and bottom-line estimates on heavy investments in its soon-to-launch Disney+ streaming service and the impact of its Twenty-First Century Fox acquisitions.  

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

  • How to trade this sell-off, according to Schaeffer's Senior Quantitative Analyst Rocky White.
  • Analyst sees big upside for this pharma stock.
  • Morgan Stanley is driving the Ford stock rally bandwagon. 
  • Plus, CVS reports blowout earnings, while a rival plans to close 200 stores, and GW Pharmaceuticals' epilepsy drug sales soar.

Stock Futures Chart Aug 7

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 860,334 call contracts traded on Tuesday, compared to 672,164 put contracts. The single-session equity put/call ratio fell to 0.78, while the 21-day moving average rose to 0.65.
  2. CVS Health Corp (NYSE:CVS) stock is up 5.7% in electronic trading, after the pharmacy chain reported second-quarter earnings and revenue that exceeded analysts' expectations. CVS also upped its full-year guidance, clearly benefiting from its recent Aetna acquisition. The shares are set to test a key technical ceiling today. 
  3. Staying with pharmacy names, Walgreens Boots Alliance Inc (NASDAQ:WBA) stock is down 0.5% ahead of the bell, after the company announced plans to close around 200 stores in the U.S. The closures are expected to save Walgreens in excess of $1.5 billion annually by 2022. WBA fell to a five-year low of $49.31 on May 31, and has shed nearly 25% in 2019 -- making it the worst-performing Dow stock year-to-date.
  4. The shares of GW Pharmaceuticals PLC (NASDAQ:GWPH) are up 10.8% in electronic trading, after the biotech's cannabis-derived epilepsy drug Epidiolex more than doubled its sales from the previous quarter. So far, Guggenheim and Stifel have upped their price targets to $245 and $228, respectively. GWPH had already gained 56.5% year-to-date as of yesterday's close. 
  5. The weekly crude inventories report will be released today. Earnings from 3D Systems (DDD), Applied Optoelectronics (AAOI), Canada Goose (GOOS), Capri Holdings (CPRI), CyberArk Software (CYBR), Infinera (INFN), Intrexon (XON), Lyft (LYFT), Roku (ROKU), Switch (SWCH), Skyworks Solutions (SWKS), and Teva Pharmaceutical (TEVA) are due.

stock market news aug 7

Shanghai Composite Sinks Again; Europe Set to Snap Losing Streak

For the most part, Asian equities traded in the red once again. China’s Shanghai Composite fell for a sixth straight day, ending with a 0.3% loss, though Hong Kong’s Hang Seng managed a 0.1% gain. Japan’s Nikkei also settled in the red, giving back 0.3%, while South Korea’s Kospi fell 0.4%. 

Stocks in Europe, on the other hand, are set to break their recent losing streak. More specifically, London's FTSE 100 is up 0.7%, which would be its first win in seven sessions, despite a number of earnings misses. France’s CAC 40 is also gaining, up 1.2%, and the German DAX is following suit, up 1.1%, even though the country’s industrial output in June fell more than expected.


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