North Korea has threatened a "nuclear showdown" if the U.S. calls off a June 12 summit
Dow Jones Industrial Average (DJI) futures are pointed lower this morning, after the Trump administration threatened to impose new tariffs on auto imports. Geopolitical tensions remain, as well, with a North Korean official saying the country could call off a June 12 summit with the U.S. following recent comments from Vice President Mike Pence -- but if Washington chooses to suspend the meeting, it could end in a "nuclear-to-nuclear showdown." Also in focus is a round of speeches from central bank officials, following yesterday's dovish Fed minutes.
Continue reading for more on today's market, including:
- The drug stock crushing shorts.
- A Russian hacking scandal weighed on Cisco Systems stock.
- This retail stock just had its best day since 2001.
- Plus, an analyst's "top large cap pick"; L Brands slashes its profit forecast; and NetApp stock dips on guidance.
5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 765,565 call contracts traded on Wednesday -- the fewest since April 11 -- compared to 495,002 put contracts. The single-session equity put/call ratio rose to 0.65, and the 21-day moving average fell to 0.61.
- Alibaba Group Holding Ltd (NYSE:BABA) stock is up 0.9% in electronic trading, after Raymond James called the e-commerce concern its "top large cap pick," and raised its price target to $300 from $250 -- a 52% premium to last night's close at $196.80. Alibaba stock has gained 14% in 2018, and has consolidated above the $192 level in the past three weeks.
- L Brands Inc (NYSE:LB) stock is 5.1% lower ahead of the bell, after the Victoria's Secret parent gave weak current-quarter earnings guidance and slashed its 2018 profit forecast. In response, Deutsche Bank and Nomura issued price-target cuts to $44 and $29, respectively. LB shares have shed 43% in 2018 and fell to a six-year low of $30.70 on May 10.
- Shares of NetApp Inc. (NASDAQ:NTAP) are down 4.2% in electronic trading, after the tech name gave 2019 guidance that was lower than anticipated. However, the company's fiscal fourth-quarter beat prompted at least four brokerages to give price-target hikes on the stock, including Longbow to $80 from $75. The $80 would mark a level not seen since the dot-com era for NetApp stock, which has added 21% in 2018 and has relied on its 80-day moving average to catch any pullbacks.
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Philadelphia Fed President Patrick Harker and Atlanta Fed President Raphael Bostic are scheduled to speak. The Fed's balance sheet, weekly jobless claims, and existing home sales data are also expected. Autodesk (ADSK), Big Lots (BIG), Deckers Outdoor (DECK), Gap (GPS), and Shoe Carnival (SCVL) will report earnings.
Trade Concerns Hit Asia, Auto Stocks Pressure Europe
Stocks in Asia finished mostly lower, as trade concerns continued to grow. Auto stocks took a hit amid indications the U.S. may be looking to impose tariffs of up to 25% on imports, with sector heavyweights like Hyundai, Kia, and Toyota all declining about 3% on the day. Japan's Nikkei ended 1.1% lower, South Korea's Kospi lost 0.2%, China's Shanghai Composite shed 0.4%, and as the only gainer, Hong Kong's Hang Seng picked up 0.3%.
Markets in Europe are mixed at midday, as weakness in auto stocks counters strength in tech. Meanwhile, in the U.K., the pound is climbing after better-than-expected retail sales data fueled speculation over a Bank of England rate hike this summer. At last glance, London's FTSE 100 is 0.3% lower, Germany's DAX is down 0.2%, and France's CAC 40 is up 0.3%.