Stock Futures Down; Chip Stocks, FANGs Weaken; Tesla Rated 'Sell' – Investor's Business Daily

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Stock futures took a premarket dip Wednesday, as profit taking continued across tech sector stocks and selling in China’s stock market set a cautious tone for early trading.

XNasdaq 100 futures dipped 0.3% as chips, China stocks and the FANG teach leaders all came under early pressure. Futures for the Dow Jones industrial average and S&P 500 slipped 0.2% below fair value.

A brisk sell off tore across Asia’s stock markets Wednesday, triggered partly by reports that the People’s Bank Of China had recommended tightening the country’s money supply. Hong Kong’s Hang Seng Index plummeted 2.1%. In Japan, Tokyo’s Nikkei 225 dived 2%.

The mood had a moderate impact on Europe’s markets, where Frankfurt’s DAX was down 0.9% near midday, with the CAC-40 in Paris off 0.5% and the FTSE 100 in London struggling to hold a fractional gain.

Home Depot, Techs Lead Dow Declines

Early weakness on the Dow started with Home Depot (HD), which as down 0.7% after reaffirming its fiscal 2017 earnings and revenue guidance, and announcing a $15 billion share repurchase program. Home Depot shares on Wednesday traded not quite 14% above a 160.96 buy point.

Tech stocks showed many of the Dow’s heaviest early losses,  with Cisco Systems (CSCO) and Apple (AAPL) each down 0.5%, while IntelINTC  and Microsoft (MSFT) each slipped 0.4%.

Apple is four weeks into a flat consolidation, hovering just out of buy range beyond a 160.97 buy point.

All of the FANG stock tech leaders traded lower. Facebook (FB) and Netflix (NFLX) paced the downside, each losing 0.7%.

Tesla (TSLA) took a 0.7% premarket loss. Cascend Securities downgraded the stock to sell, from hold, citing a weakening in customer demand due to the company’s ongoing production delays, and asserting the company would need to return to the market to raise cash before the end of 2018.

Chip stocks were under moderate early pressure, with Cirrus Logic (CRUS), Qorvo (QRVO) and Skyworks Solutions (SWKS) all down about 2%.  Qorvo has declined in the past seven sessions, ending Tuesday in a test of support  at its 200-day moving average.

Dronemaker Aerovironment (AVAV) landed a 24%  premarket gain, after reporting a surprise fiscal second-quarter profit that topped analyst expectations by a wide margin, along with a 47% gain in revenue and solid full-year guidance.

The stock ended Tuesday 22% below a possible 55.85 buy point in a nine-week basing pattern.

Bitcoin broke above $13,000, putting the cyrptocurrency up nearly 18% since the start of the week. Futures for bitcoin-related stocks were also positive, with Riot Blockchain (RIOT) up more than 3% and Marathon Patent Group (MARA) hauling an 11% gain.

Chipmaker Broadcom (AVGO) and retailer Lululemon Athletica (LULU) report after the close.


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