Dow Futures Slip as China Trade Tensions Resurface

AAPL and FB shares are moving higher post-earnings

Oct 31, 2019 at 9:18 AM
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Dow Jones Industrial Average (DJI) futures are trading below fair value this morning, as traders react to a Bloomberg report suggesting the Chinese government is unsure about the chances of a long-term trade deal with the U.S. This news is overshadowing strong quarterly reports from the tech sector, where Apple (AAPL) and Facebook (FB) are gaining in pre-market trading following their releases. Futures on the S&P 500 Index (SPX) are below fair value, as well, as stocks look set to cool after yesterday's Fed-induced rally.

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

Stock Futures Chart Oct 31

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 1.11 million call contracts traded on Wednesday, compared to 669,880 put contracts. The single-session equity put/call ratio was 0.60, while the 21-day moving average came in at 0.67.
  2. Starbucks Corporation (NASDAQ:SBUX) delivered another strong quarter to investors, sending the shares up more than 3% before the open. Again, it was strength out of China that helped drive impressive sales for the quarter, along with cold beverages in the U.S. The upbeat earnings release comes as SBUX stock was hovering just above the 200-day moving average.
  3. Another stock moving higher post-earnings is Cigna Corp (NYSE:CI). The company's top- and bottom-line beat has the shares on pace to top the 320-day moving average this morning, which seems to be what option bulls were betting on. The healthcare company's adjusted earnings per share of $4.54 beat the consensus per-share estimate of $4.36, and it also raised its full-year outlook.
  4. Twitter Inc (NYSE:TWTR) is in focus this morning after the company said it was banning political advertising on its platform. The move is in direct contrast to rival FB's policy, and has TWTR shares down 1.5% before the open. This comes after the stock suffered a massive post-earnings bear gap earlier this month.
  5. Today brings weekly jobless claims, personal income and spending data, as well as the employment cost index (ECI). The Chicago purchasing managers index (PMI) is also expected. For earnings releases, Altria (MO), Clorox (CLX), Dunkin (DNKN), Fortinet (FTNT), Fluor (FLR), IMAX (IMAX), Kraft Heinz (KHC), Live Nation (LYV), Pinterest (PINS), Royal Caribbean (RCL), Sirius XM (SIRI), Wayfair (W), World Wrestling (WWE), Western Union (WU), and YETI (YETI) are among those reporting.

stock market news oct 31

Chinese Stocks Drop on Dismal Factory Data

It was a mostly higher finish for Asian stocks today, as investors sifted over the U.S. Fed's latest interest rate cut. China's Shanghai Composite was an exception to the rule, with a 0.3% loss, after factory activity from October contracted for the sixth straight month in October, with the country's official purchasing managers manufacturing index (PMI) arriving at at 49.3 -- down from its September reading.

Meanwhile, Hong Kong's Hang Seng was the biggest winner, tacking on 0.9% after an interest-rate cut from the city's central bank. Amid an announcement from the Bank of Japan (BoJ) that its monetary policy would remain unchanged, the Nikkei added 0.4%. Elsewhere, an earnings beat from Samsung Electronics helped the Kospi in South Korea cling to a 0.2% win.

European markets are lower midday amid waning optimism over a trade deal between the U.S. and China. A merger announcement from Fiat Chrysler (FCA) and French-owned PSA Groupe, worth roughly $6.1 billion, is also in focus. The French CAC 40 is 0.4% lower today, while the German DAX is down 0.2%. Meanwhile, the London FTSE 100 has lost 1%, as traders turn their attention toward day-one of U.K. Primer Minister Boris Johnson and competitor Jeremy Corbyn's campaign trail ahead of the December election.


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