Corporate earnings will continue to roll in today
Stock futures are signaling an extended sell-off after Friday's historic pullback. Specifically, the Dow Jones Industrial Average (DJI) is pacing for a more than 200-point drop at the open, while the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) are set for sharp slides, as well. As such, volatility will likely remain in focus, as the CBOE Volatility Index (VIX) comes off its highest close since the U.S. Presidential election. Traders will also continue to monitor fourth-quarter earnings season, on top of news that the Federal Reserve has hit banking giant Wells Fargo (WFC) with penalties meant to limit its growth.
Continue reading for more on today's market, including:
- The data saying to buy Netflix stock this week.
- An options strategy built for earnings season
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The retail stock that reached fresh highs Friday.
- Plus... Broadcom's "best and final offer"; big Apple Music news; and the drug stock set to jump after earnings.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Friday, compared to 867,766 put contracts. The single-session equity put/call ratio jumped to 0.77 -- the highest since Sept. 22 -- while the 21-day moving average moved up to 0.56.
- Broadcom Ltd (NASDAQ:AVGO) has submitted what it's calling its "best and final offer" for Qualcomm (QCOM). The deal is a cash-and-stock offer of $82 per share. QCOM shares settled at $66.07 on Friday. AVGO, meanwhile, was last seen trading at $235.48. Broadcom stock's pointed higher before the open, while Qualcomm is set to pull back.
- A Wall Street Journal report suggests Apple Inc.'s (NASDAQ:AAPL) Apple Music
is on pace to overtake music streaming service Spotify in paid U.S. subscribers. Spotify is expected to go public this year. AAPL stock, meanwhile, finished its earnings week at $160.50.
- Bristol-Myers Squibb Co (NYSE:BMY) is up 4% in electronic trading after earnings. Traders are also applauding positive drug trial results for a combination therapy for the company's key cancer drug Opdivo. BMY stock closed last week at $63.48.
- The Markit services purchasing managers index (PMI) and the Institute for Supply Management's (ISM) non-manufacturing index will kick off the week. Arconic (ARNC), Cirrus Logic (CRUS), Fabrinet (FN), Fortinet (FTNT), Oclaro (OCLR), Sysco (SYY), and Skyworks (SWKS) will report earnings.
Global Stocks Pulled Lower by U.S. Weakness
Most Asian markets followed the bearish lead from Wall Street, as Friday's U.S. jobs report sparked a surge in bond yields. Japan's Nikkei suffered the worst of its regional peers, shedding 2.6% -- its biggest one-day percentage drop since November 2016 and its first close south of 23,000 this year -- as the yen strengthened against the dollar. Elsewhere, South Korea's Kospi gave back 1.3%, and Hong Kong's Hang Seng lost 1.1%. China's Shanghai Composite, meanwhile, bucked the trend, adding 0.7% as financial shares rose and data showed growth in the country's service sector at a nearly six-year high.
The selling has spread to Europe, with the major benchmarks swimming in red ink at midday. While bank stocks have accumulated some of the biggest losses, traders are also keeping a cautious eye on Germany, after coalition negotiations failed to meet a Sunday deadline -- though talks between Chancellor Angela Merkel's conservatives and the Social Democrats resumed today. At last check, the German DAX was down 0.9%, the French CAC 40 was off 1.5%, and London's FTSE 100 was 1.3% lower.