Stock Futures Fall on Semiconductor Headwinds
Broadcom's ugly outlook could weigh on markets today
Stocks are set for a weak open this morning, with futures on the Dow Jones Industrial Average (DJI) trading modestly below fair value. Traders continue to monitor tensions between the U.S. and Iran, though oil prices are giving back some of yesterday's gains, with July-dated crude futures down 0.2% at $52.16 per barrel. Meanwhile, semiconductor stocks are pacing for a rocky session, after Broadcom (AVGO) gave an ugly outlook for the sector in its earnings release last evening, dramatically cutting its full-year forecast in the process. This is pressuring futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX), as well.
Continue reading for more on today's market, including:
Bearish options spread hits real estate ETF. New analyst attention for Uber and Lyft stocks. The popular call strike from Disney's big day. Plus, today's IPO buzz; inside Broadcom's weakness; and Tesla request denied.
5 Things You Need to Know Today
The Chicago Board Options Exchange (CBOE) saw 877,774 call contracts traded on Thursday, compared to 548,758 put contracts. The single-session equity put/call ratio moved down to 0.63, while the 21-day moving average was 0.68.Online retailer of pet food and supplies Chewy, Inc. (NYSE:CHWY) will go public today, with its initial public offering (IPO) priced at $22, putting its market cap at almost $9 billion. The company was initialing planning for the IPO to be priced between $19-$21, and its majority owner PetSmart will receive roughly $900 million from the offering.Taking a closer look at AVGO's dismal earnings update, the company lowered its outlook for the second half of the year, saying the Huawei ban was a factor for the weak forecast. The chipmaker's CEO Hock Tan said that they're seeing a slowdown in demand because of geopolitical uncertainties. Broadcom stock is set for a 9% slide at the open. Tesla Inc (NASDAQ:TSLA) is trading down 1.8% pre-market after U.S. officials denied the electric automaker's request for more relief from tariffs. This comes after trade authorities made some solar panels exempt from tariffs. Meanwhile, Berenberg reiterated its bull case for TSLA stock, in which it sees the shares traveling up to and potentially beyond $500. They closed Thursday at $213.91. In today's trading, retail sales, industrial production data, business inventories, and consumer sentiment data all on tap. Cheetah Mobile (CMCM) will report earnings.The Fed meeting will be the focus of next week's schedule.
Stocks in Asia, Europe Fall
Yesterday's oil tanker strikes in the Middle East had Asian markets ending mostly lower today, with the exception of the Nikkei in Japan, which surged 0.4% on a big gain for Sony. The Shanghai Composite in China was the biggest loser, on a 1% drop as investors fret over the ongoing trade dispute with Washington. Elsewhere, Hong Kong's Hang Seng dropped 0.7% as turmoil over a proposed extradition bill bubbled, while the South Korean Kospi suffered a 0.4% dip.
Tensions in the Middle East are affecting European markets as well, with major indexes in the red at midday. London's FTSE 100 is 0.5% lower as Conservative candidate and Brexit enthusiast Boris Johnson inches closer to taking over Theresa May's prime minister position, while the French CAC 40 is down 0.5%, and the DAX in Germany has lost 0.8%.