Stock Futures Pivot Higher Amid Tariff Delay Reports

A Wall Street Journal report turned stock futures positive this morning

by Patrick Martin

Published on Dec 10, 2019 at 9:17 AM
Updated on Dec 10, 2019 at 9:45 AM

After markets snapped a three-day win streak yesterday, stock futures are reacting to a slew of trade-related headlines this morning. Dow Jones Industrial Average (DJI) futures were initially off triple-digits after the South China Morning Post suggested the chances of a U.S.-China trade deal this week are slim. However, futures quickly turned positive after the Wall Street Journal reported Washington is planning to delay additional tariffs on Chinese goods that were set to go into effect this Sunday, Dec. 15.

Elsewhere, the Fed's two-day policy-setting meeting kicks off later today, though no rate cut is expected. Plus, House Democrats and President Donald Trump are reportedly finalizing the United States-Mexico-Canada Agreement (USMCA), a trade deal to replace the North American Free Trade Agreement (NAFTA). 

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

  • Schaeffer's Senior V.P. of Research Todd Salamone outlines why this December could be different for stocks.
  • Options traders have been blasting these three high-profile stocks.
  • Plus, AutoZone scores big earnings beat; NFLX downgraded on competition concerns; and Stitch Fix avoids quarterly loss.  

Stock Futures Chart Dec 10

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 918,373 call contracts traded on Monday, compared to 587,258 put contracts. The single-session equity put/call ratio climbed to 0.64, while the 21-day moving average stayed at 0.59.
  2. AutoZone, Inc. (NYSE:AZO) stock is up 5.7% in electronic trading, after the car parts retailer reported fiscal first-quarter earnings and revenue that topped analyst forecasts. AZO is primed to open at record-high levels, and had already gained 39.4% year-to-date heading into today.
  3. Netflix Inc (NASDAQ:NFLX) stock is down 2.4% ahead of the bell, after Needham cut its rating to "underperform" from "hold." The brokerage firm anticipates subscriber loss amid a crowded streaming market. This is the second downgrade in roughly two weeks for the FAANG stock, which is staring up at resistance at its 140-day moving average.
  4. The shares of Stitch Fix Inc (NASDAQ:SFIX) are up 10.2% ahead of the bell, after the e-tailer broke even for its fiscal first quarter, toppling the consensus estimate for a per-share loss of 6 cents. Six brokerages have issued price-target hikes already, the highest coming from SunTrust Robinson to $38 from $36. SFIX is set to extend its lead over previous resistance at its 160-day trendline, and open at its highest point since late July.
  5. Monthly auto sales will be released today. AeroVironment (AVAV), Marvell Technology (MRVL), Salesforce.com (CRM), Workday (WDAY), and Zscaler (ZS) will report earnings.

Buzz Chart Dec 10

Overseas Markets Digest Various Economic Data

Similar to the action in the U.S. on Monday, there was little movement in Asian stocks, with the major indexes settling near breakeven. Economic data was in focus in China, where consumer inflation picked up in November, with the Shanghai Composite closing up 0.1%. The Hang Seng, however, dropped 0.2%, and Japan’s Nikkei fell 0.09% despite a strong day for Nintendo stock. Finally, South Korea’s Kospi closed up 0.5%.

In Europe, stocks are moving lower. Traders are considering a tepid October gross domestic product (GDP) update out of the U.K, and the London FTSE 100 is down 0.9% as a result. France’s CAC 40 is also moving lower, down 0.7%, as Sanofi shares make another big move, this time to the upside. Meanwhile, the German DAX is struggling the most, down 1.4%. 



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