Stock Futures Recovery Mode Despite Second Wave Fears

Stocks are looking to bounce back after yesterday's steep sell-off

Assistant Editor
Jun 12, 2020 at 9:10 AM
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Futures on the Dow Jones Industrial Average (DJI) are nearly 550 points above fair value this morning, ready to put yesterday's 1800-point drop in the rear-view mirror. Nasdaq-100 Index (NDX) and S&P 500 (SPX) futures are also in the black, as all three indexes look to recover from their worst day since March. As travel stocks soar ahead of the bell, investors are still ruminating the Federal Reserve's tepid economic outlook from Wednesday, especially amid reports that over a half-dozen states are now facing a second-wave of coronavirus cases. Meanwhile, oil prices are picking up as well, with July-dated crude up 1%, at last check. 

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

  • Call traders bite into Beyond Meat stock
  • PLAY fumbled ahead of earnings. 
  • Plus, CAT upgraded; Lululemon's first earnings miss in three years; and the airline stock taking off an analyst update.

futures june 12

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 2 million call contracts traded on Thursday, compared to 1.4 million put contracts. The single-session equity put/call ratio rose to 0.70, and the 21-day moving average fell to 0.49.
  2. Caterpillar Inc (NYSE:CAT) is up 2% ahead of the bell, despite a downgrade from BMO to "market perform" from "outperform," that cited financial constraints for customers. The stock lost 8.2% yesterday -- despite a price-target hike from UBS -- for its third-straight day in the red after a rebound was capped by the $140 region. For the month, CAT is up 15.7%.
  3. Lululemon Athletica (NASDAQ:LULU) is down 3.2% premarket, after the athleisure name reported an earnings and revenue miss. It was Lululemon's first earnings miss in three years, yet the stock has gained no fewer than nine price target hikes, including Piper Sandler to $365, and two price target cuts -- Deutsche Bank to $237. Year-to-date, LULU is up 33%. 
  4. The shares of Southwest Airlines Co (NYSE:LUV) are up 7.7% in electronic trading, after Credit Suisse upgraded the airliner to "outperform" from "neutral" and upped its price target to $45 from $35. The analyst in coverage sees Southwest as well-positioned to capitalize on the return of leisure travel thanks to its balance sheet.  Southwest stock is down 39% in 2020.
  5. Today will feature import and export price data and the University of Michigan's consumer sentiment index. 

Buzz Chart June 12

Stocks in Europe Rebounding Midday

Stocks were lower in Asia to close out the week, after fears over a second wave of COVID-19 infections led the Dow to suffer its biggest one-day plunge since March. South Korea’s Kospi led the losses after it dropped 2%. Meanwhile, Japan’s Nikkei slid 0.8%, and Hong Kong’s Hang Seng finished close behind with a 0.7% fall. Lastly, China’s Shanghai Composite was off a paltry 0.04%.

Across the pond, however, stocks are doing well, paring the European blue-chip index’s 4% losses from yesterday. Currently, France’s CAC 40 is up 1.6%, tailed closely by London’s FTSE 100 which is trading 1% higher. Meanwhile, the German DAX was last seen up 0.7%.

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