Dow Futures Drop as Key Yield Curve Narrows

Geopolitical tensions in Hong Kong and Argentina remain in focus

by Patrick Martin

Published on Aug 13, 2019 at 9:26 AM
Updated on Aug 13, 2019 at 3:39 PM

Dow Jones Industrial Average (DJI) futures are pointed sharply lower this morning, with the blue-chip index set to build on yesterday's geopolitical-inspired sell-off. Investors are nervously eyeing a narrowing of the 2-year and 10-year Treasury yield spread, as rare occurrences of a yield curve inversion have previously preceded recessions. There's also the consumer price index (CPI), which rose 0.3% in July, pointing to tame inflation. Wall Street is also monitoring continued protests in Hong Kong and the crashing Argentine peso. Global tensions have sent gold futures higher, with December-dated gold up 1.2% at $1,534.90 an ounce. 

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

  • This VIX level could be the "all-clear" for bulls, according to Schaeffer's Senior V.P. of Research Todd Salamone.
  • Analyst: Sell this lithium stock.
  • Roku stock stayed hot after a lofty bull note.
  • Plus, Advance Auto Parts reports dismal quarterly results; CEO Culp buys more GE stock; and Yum! Brands gets a new leader.

Stock Futures Chart Aug 13

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 767,458 call contracts traded on Monday, the fewest since March 28. This is compared to 599,239 put contracts. The single-session equity put/call ratio climbed to 0.78, while the 21-day moving average rose to 0.67.
  2. Advance Auto Parts, Inc. (NYSE:AAP) stock is down 7.8% in electronic trading, after the auto parts retailer reported second-quarter earnings and revenue that fell short of expectations. The company also trimmed its full-year guidance and same-store sales expectations. AAP fell to an annual low of $139.96 on Aug. 5, and had shed 10% in 2019 as of yesterday's close at $142.16.
  3. One day removed from a scathing bear noteGeneral Electric Company (NYSE:GE) stock is up 1.3% ahead of the bell, after a Securities and Exchange Commission (SEC) filing revealed CEO Larry Culp bought 331,684 shares of GE at an average price of $9.04 per share. GE has turned in only two positive sessions in the last 10 days, and has shed 13% already in August.
  4. The shares of Yum! Brands, Inc. (NYSE:YUM) are in focus today, after the restaurant chain named David Gibbs as new CEO, effective Jan. 1, 2020. YUM nabbed a record high of $119.72 back on Aug. 1, and the subsequent pullback found support at its ascending 10-day moving average. 
  5. Earnings reports from Brinker International (EAT), II-VI (IIVI), JD.com (JD), JinkoSolar Holding (JKS), and Tilray (TLRY) are due out. 

stock market news aug 13

Asian Stocks Marred by Hong Kong Protests; Economic Data Weighs on Europe

Asian stocks tumbled as violent protests in Hong Kong continued. Hong Kong's Hang Seng was the biggest regional decliner, shedding 2.1% amid stiff losses for casino operator Galaxy Entertainment. Elsewhere, Japan's Nikkei reopened from its long weekend with a 1.1% drop, while South Korea's Kospi gave back 0.9%, and China's Shanghai Composite dipped 0.6% after data showed new bank loans fell short of expectations in July.

The selling has spread to Europe, where stocks are swimming in red ink at midday. The German DAX is the leading laggard, down 1% after the ZEW economic sentiment indicator fell to -44.1 in August -- its lowest level since December 2011, and well below the consensus estimate. Meanwhile, London's FTSE 100 is 0.7% lower, and the French CAC 40 is off 0.6%.


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