The Dow is set to retreat from yesterday's record closing high, as traders digest a relatively hawkish Fed
Dow Jones Industrial Average (DJIA) futures are trading well below fair value this morning. On Wednesday, the blue-chip index closed at a record high after the Fed raised its benchmark interest rate and laid out a plan to shrink its
balance sheet, but the central bank's relatively hawkish tone appears to be weighing on stocks today. Adding to the risk-off backdrop is a continued decline in
oil prices -- July-dated crude futures are down 0.7% at $44.41 per barrel -- and more pre-market downside for tech shares.
In addition to a round of economic data, which includes slimmer-than-expected weekly jobless claims, traders will also be keeping an eye trained on D.C. Reports are swirling that special counsel Robert Mueller is conducting a federal probe over whether President Donald Trump obstructed justice in a broader investigation into Russia's interference in the U.S. presidential election, following last week's congressional testimony from former FBI Director
James Comey.
Continue reading for more on today's market, including:
- The tech signal not seen in three years.
- Barclays thinks this oil stock is headed to new lows.
- This healthcare stock boomed on buzz about a potential Chinese buyer.
- Plus, one Kroger options trader wins big; Amazon's newest target; and Bank of America's latest cost-cutting measures.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 856,105 call contracts traded on Wednesday, compared to 570,694 put contracts. The single-session equity put/call ratio moved up to 0.67, and the 21-day moving average remained at 0.62.
- Kroger Co (NYSE:KR) reported better-than-expected first-quarter earnings, but lowered its full-year forecast, citing larger-than-anticipated inventory costs. KR stock is down 13.3% in pre-market trading -- set to open at a two-year low -- putting one put buyer in a potentially profitable situation.
- Amazon.com, Inc. (NASDAQ:AMZN) is reportedly interested in corporate messaging startup Slack Technologies Inc., according to Bloomberg. Despite a price-target hike to $1,100 from $975 at Instinet, AMZN stock is sinking with its sector peers ahead of the bell, down 1.4% at last check.
- Bank of America Corp (NYSE:BAC) has started passing out pink slips in its costly operations and technology division, as a means of lowering expenses and increase financial targets. BAC shares are trading down 1% in electronic trading.
- The Empire State manufacturing survey, the Philadelphia Fed business outlook survey, import/export data, industrial production figures, the housing market index, and Treasury International Capital (TIC) data all will be released. The Fed will also unveil its balance sheet. Bob Evans Farms (BOBE) and Finisar (FNSR) report earnings.
Overseas Trading
Stocks throughout Asia struggled following yesterday's rate hike in the U.S., though China's Shanghai Composite managed a slight win. Specifically, the index rose 0.1%, after the Bank of China decided to keep interest rates unchanged. In the rest of the region, sharp losses from energy stocks pressured the major indexes lower. For example, Hong Kong's Hang Seng lost 1.2% and South Korea's Kospi fell 0.5. In Japan, the Nikkei closed down 0.3%, as the yen strengthened.
Losses are even steeper in Europe following the latest monetary policy decision from the BoE. By the numbers, the French CAC 40 and German DAX are both down 1.1%, while the FTSE 100 has dropped 1.2% in London. The energy sector is underperforming amid the drop in oil prices, and the retail sector is getting hit especially hard as well, due to disappointing retail sales data from May. Traders are now ready to dissect a speech from Bank of England Governor Mark Carney.