Crude futures are signaling another day of sharp losses
Dow Jones Industrial Average (DJIA) futures are trading below fair value, one day after the blue-chip index closed at a
record high. While most
FAANG stocks seem set to extend their recent rebound, speeches from a number of
Fed officials could also impact the stock market. Overnight, Chicago Fed President Charles Evans took a more dovish tone than his peers, saying "the current environment supports very gradual rate hikes."
A mid-afternoon speech on tax reform from House Speaker Paul Ryan will likely draw attention. Plus, with July-dated crude futures down 2.6% at $43.04 per barrel, oil prices are flirting with bear-market territory on reports Nigeria and Libya are increasing oil production in an already-saturated market.
Continue reading for more on today's market, including:
- The best and worst scenarios for stocks post-rate hike, courtesy of Schaeffer's Senior V.P. of Research Todd Salamone.
- 5 reasons the stock market could have more room to run.
- Options traders are bracing for emerging markets headwinds.
- Plus, Tesla takes aim at China; the Dow stock eyeing new highs; and Lennar earnings impress.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 889,433 call contracts traded on Monday, compared to 516,826 put contracts. The single-session equity put/call ratio fell to 0.58, and the 21-day moving average remained at 0.63.
- According to Bloomberg, Tesla Inc (NASDAQ:TSLA) is nearing a deal to build a vehicle production facility in China, giving it a front row seat to the world's biggest auto market. Separately, the company was cleared of any liability in last year's fatal "Autopilot" Model S sedan crash. TSLA stock is up 1.7% ahead of the bell.
- Cowen and Company upgraded McDonald's Corporation (NYSE:MCD) to "market perform" to "outperform," and raised its price target on MCD shares to $180 from $142, with the brokerage firm waxing optimistic on the fast food giant's digital efforts. The Dow stock is 0.6% higher in electronic trading, and could take out its June 2 record high of $153.90.
- Lennar Corporation (NYSE:LEN) reported fiscal second-quarter profit of 91 cents per share on revenue of $3.3 billion -- much better than analysts were expecting. LEN stock could buck its history of negative post-earnings reactions, up 3.1% ahead of the bell.
- Fed Vice Chair Stanley Fischer, Boston Fed President Eric Rosengren, and Dallas Fed President Robert Kaplan are set to take the mic today. Adobe (ADBE), FedEx (FDX), La-Z-Boy (LZB), and Red Hat (RHT) will report earnings.
Overseas Trading
Stocks in Asia closed mixed. Outperforming its regional peers was the Japanese Nikkei, rising 0.8% and hitting a nearly two-year high. Stocks got a lift from a weaker yen, as well as strong gains from tech names. In China, investors were awaiting tonight's MSCI decision on whether to include some the country's stocks in its emerging market index. In the meantime, the Shanghai Composite dropped 0.1% and Hong Kong's Hang Seng fell 0.3%. Elsewhere, South Korea's Kospi gave back 0.1%.
In Europe, stocks are testing positive territory at the halfway point, as traders digest falling oil prices. Also in focus are yesterday's Brexit talks between the U.K. and European Union. Plus, Bank of England Governor Mark Carney said that it's still not time to raise interest rates. The French CAC 40 and German DAX were up 0.3% and 0.2%, respectively, at last check. However, the FTSE 100 was last seen fractionally lower.