Stock Futures Eye Extended Rally Despite Second-Wave Fears

Futures on the Dow Jones Industrial Average (DJI) are up over 100 points this morning, despite mounting second wave evidence of COVID-19 in China -- where Beijing has raised its emergency level -- as well as regional spikes in the U.S. Nasdaq-100 (NDX) and S&P 500 (SPX) futures are also modestly above fair value, as Wall Street looks to extend its rally, with FAANG stocks providing a big boost to pre-market trading. Meanwhile, investors await the second day of Congressional testimony from Federal Reserve Chairman Jerome Powell. 

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

• Schaeffer's Senior Quantitative Analyst Rocky White looks at 20 stocks due for a short-term surge. 
• See what had Weight Watchers stock popping yesterday.
• Plus, Southwest Airlines' socially distant plan; Nikola's new coverage; and DraftKings announces a hefty share offering.

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw 1.5 million call contracts traded on Tuesday, compared to 689,302 put contracts. The single-session equity put/call ratio fell to 0.45, and the 21-day moving average dropped to 0.49.
2. Southwest Airlines Co (NYSE:LUV) is down 0.4% in electronic trading, after announcing it will limit ticket sales to two-thirds of capacity through Sept. 30 while keeping middle seats empty. However, an encouraging sign is Southwest's operating revenue, which fell by a slimmer-than-expected margin year-over-year. Southwest stock is up almost 63% since its May 14 six-year bottom of $22.46.
3. Nikola Corporation (NASDAQ:NKLA) is up 4.1% before the open, after Cowen initiated coverage with an “outperform” rating, citing the company's intellectual property in software and firmware it has developed with other companies. Year-over-year Nikola has gained a whopping 521.8%.
4. The shares of DraftKings Inc (NASDAQ:DKNG) are down 5.1% ahead of the bell, after the company announced it was offering 33 million share offering valued at $1.3 billion. DraftKings stock has more than doubled since the company went public as a special purpose acquisition company (SPAC) in late April, and is now up 302% in the last six months.
5. Today will bring housing starts and building permits, while Carnival will step into the earnings confessional. OPEC will also release its monthly report.

Stocks Mostly Rise Despite Growing Tensions

Stocks in Asia were mostly higher today, despite news that the International Monetary Fund (IMF) said the global economy is in a position to experience a more significant contraction than analysts originally estimated. Hong Kong’s Hang Seng rose 0.6% for the day. Meanwhile, China’s Shanghai Composite and South Korea’s Kospi both tacked on 0.1%, with scrutiny surrounding the latter’s mounting tensions in the wake of news that North Korea reportedly destroyed a South Korean liaison office. Elsewhere, Japan’s Nikkei lost 0.6%, after regional economic data showed the country’s exports spiraled 28.3% year-on-year.

European stocks are rising as investors latch onto optimism surrounding a potential economic recovery, but investors are keeping a close eye on the aforementioned geopolitical tensions between North and South Korea. Currently, France’s CAC 40 is up 1.1%, the German DAX was last seen 0.6% higher, and London’s FTSE 100 had risen 0.4%.