Stock Futures Anticipate More Downside to Wrap Up Wild Week

U.S.-China tensions are bubbling over once again

Deputy Editor
Jul 24, 2020 at 9:14 AM
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Futures on the Dow Jones Industrial Average (DJI) are headed lower on Friday morning, extending last night's losses with a roughly 100-point drop so far. Big Tech is leading the march lower, with Apple (AAPL) and Microsoft (MSFT) both in retreat while a marginal earnings beat from blue-chip Verizon (VZ) isn't doing enough to keep losses in check. Elsewhere, futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) are both swimming in red ink ahead of the open as well, as investors monitor escalating diplomatic tensions between the U.S. and China.

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

  • Options bulls toy with Hasbro stock ahead of its earnings event. 
  • Speculate on this chip stock's next move while its options are on sale. 
  • Plus, AXP steps into the earnings confessional; GS settles 1MDB scandal; and Mattel sees pop in Barbie sales. 

Futures Chart July 24 2020

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 1.7 million call contracts traded on Thursday, and 919,600 put contracts. The single-session equity put/call ratio rose to 0.53, and the 21-day moving average climbed to to 0.49.
  2. Credit card concern and Dow member American Express Company (NYSE:AXP) revealed second-quarter earnings of 29 cents per share that came in well above the 11 cent per share loss that analysts were pricing in. AXP's revenue, however, missed the mark, sending the stock down 2% in pre-market trading. AXP is down 24.4% in the last 12 months.
  3. Fellow Dow member Goldman Sachs Group Inc (NYSE:GS) is up 0.3% ahead of the open, after the bank giant reached a $3.9 billion settlement with Malaysia over a multibillion-dollar scandal in which Goldman  was charged for misleading investors over bond sales. Goldman Sachs was accused of raising over $6.5 billion for its sovereign wealth fund 1Malaysia Development Bhd (1MDB). GS is down almost 12% year-to-date.
  4. Toymaker Mattel Inc (NASDAQ:MAT) is 4% higher ahead of the bell after reporting smaller-than-expected second-quarter losses of 26 cents per share, and better-than-expected revenue. The firm cited a 35% pop in sales of its popular Barbie brand. So far today, three brokerages have upped their price targets, including J.P. Morgan Securities to $15 from $14.
  5. The Markit manufacturing purchasing managers index (PMI), Markit services PMI, and new home sales are lined up for today.     

OV Buzz Chart July 24

Flaring U.S.-China Tensions Throw Cold Water on Asian Markets; Europe Eyes Brexit Standstill 

Stocks in Asia closed the week lower, after U.S.-China tensions continued to escalate on Thursday, with U.S. Secretary of State Mike Pompeo saying Washington would no longer tolerate Beijing’s efforts to "exploit our free and open society." Meanwhile, China retaliated against the U.S. by ordering it to close a consulate in Chengdu. As a result, China’s Shanghai Composite finished down 3.9%, followed by Hong Kong’s Hang Seng, which closed 2.2% lower. Elsewhere, South Korea’s Kospi ended down 0.7%, and Japan’s Nikkei remained closed for a public holiday.

Across the pond, stocks are also lower, as the U.K. and the European Union (EU) continue to make no progress on a deal over their post-Brexit trading relationship, pushing the deadline back to September. At last check, the German DAX was down 1.5%, France’s CAC was down 1.3%, and London’s FTSE 100 was down 1.2%.

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