Stock Futures Fall as Investors Prepare for Earnings Season

The Fed looks like it will stand by its hawkish monetary policy

Deputy Editor
Jul 11, 2022 at 9:09 AM
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Fresh off a solid weekly win, stock futures are lower on Monday as Wall Street prepares for the start of earnings season. Dow Jones Industrial Average (DJIA) futures are off by roughly 200 points, as a round of highly anticipated corporate earnings reports due out later this week could reveal clues about the health of the economy. Elsewhere, futures on the Nasdaq-100 Index (NDX) and the S&P 500 Index (SPX) are deep in the red as well, as many continue to speculate that the U.S. Federal Reserve will stand by its hawkish approach toward combatting inflation.

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

  • Why value traders should keep an eye on this tech concern.
  • Is this cannabis stock's valuation still too high?
  • Plus, Musk to terminate Twitter takeover; toy maker nabs a bull note; and Covid-19 weighs on gaming stocks once again.

Futures Chart July 11

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.3 million call contracts and 734,512 put contracts traded on Friday. The single-session equity put/call ratio fell to 0.56, and the 21-day moving average stayed at 0.65.
  2. Twitter Inc (NYSE:TWTR) is sliding before the opening bell, after Tesla (TSLA) CEO Elon Musk officially announced he is pulling out of his $44 billion takeover deal. In response, Twitter said it would take legal action against Musk. TWTR was last seen 6% lower, and sports 14.8% year-to-date deficit.
  3. Goldman Sachs upgraded toy maker Mattel Inc (NASDAQ:MAT) to "buy" from "neutral," helping the shares add 3.2% in electronic trading. The brokerage firm believes the company is set to benefit from demand stemming from new TV and film releases. Year-over-year, MAT boasts a more than 12% lead.. 
  4. Macau, a Chinese gambling enclave, is set to begin a one-week shutdown amid a surge of Covid-19 infections. The news is weighing on gaming stocks with operations in the region, most notably Wynn Resorts, Limited (NASDAQ:WYNN) and Las Vegas Sands Corp. (NYSE:LVS), which were last seen down 5.2% and 4.7%, respectively, ahead of the open. In 2022, WYNN was already down 33.6%, while LVS sported a 31.6% 12-month deficit.
  5. Three-year inflation expectations are due out today.

OV Buzz Chart July 11

Covid-19 Shutdowns Dent Asian Markets

Most markets in Asia moved lower today, led by the Hong Kong Hang Seng, which fell 2.8%. Several China-based tech stocks, including Alibaba (BABA) and Tencent (TCEHY) slipped after fines from the government, while casino stocks took a hit as well due to Covid-19 lockdowns in Macau. Over the weekend, China’s producer price index (PPI) showed inflating rising 6.1% in June – slightly higher than estimates but lower than the previous month. Rounding out the region, China’s Shanghai Composite fell 1.3%, while the South Korean Kospi dropped 0.4%. The only winner, Japan’s Nikkei, added 1.1%.

Elsewhere, markets in Europe are struggling midday, as investors await inflation data out of the U.S. this week. London’s FTSE 100 is down 0.3% at last check, while the country faces some political uncertainty after Prime Minister Boris Johnson’s resignation as Conservative Party leader. The German DAX and French CAC 40 are down 0.9% and 0.7%, respectively.

 

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