Dow Jones Futures: Amazon Stock Falls On Guidance;

Dow Jones futures rose modestly late Thursday, along with S&P 500 futures. Nasdaq futures fell after the Amazon earnings report. In addition to Amazon.com (AMZN), Ugg boots maker Deckers Outdoor (DECK) reported earnings. Amazon stock fell sharply while Deckers stock signaled a move to a buy point. Meanwhile, CVS Health stock, Cigna stock and UnitedHealth stock retreated. The Trump administration proposed cracking down on “back door” rebates from drugmakers to pharmacy benefit managers.




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CVS Health (CVS) and Cigna (CI) are at risk because they own pharmacy benefit managers that are involved in these rebates. Cigna recently closed its buy of PBM pure play Express Scripts. UnitedHealth (UNH), a Dow Jones stock, also owns a PBM.

Dow Jones Futures Today

Dow Jones futures rose 0.25% vs. fair value. S&P 500 futures were 0.1% higher. Nasdaq 100 futures sank 0.3%. Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular session.

President Donald Trump continued to sound optimistic about a China trade deal after the stock market close. Before the open, Trump tweeted out positive comment on China trade talks.

Current Stock Market Rally

The Nasdaq composite soared 1.4%, rallying on Facebook (FB), ServiceNow (NOW) and other techs rising on earnings or in sympathy. The S&P 500 index advanced 0.9%. The Dow Jones fell less than 0.1%, with DowDuPont (DWDP), Microsoft (MSFT) and Visa (V) falling after their earnings reports.

The current stock market rally has cleared a mini-consolidation. The major averages can now set their sights on the Dec. 3 short-term stock market peak.

Amazon Earnings Top, Amazon Stock Falls On Guidance

Amazon earnings spiked 181% to $6.04 a share, beating views by 36 cents. Revenue rose 20% to $72.4 billion, mostly beating estimates, though it was the slowest growth in three years. Amazon Web Services revenue soared 45%, also topping views.

For the first quarter, Amazon sees revenue rising 10%-18% to $56 billion to $60 billion, below the consensus of $61 billion. On the Amazon earnings call, management said the company will step up investment spending.

Amazon stock fell 4.9% late. Shares jumped 2.9% Thursday, retaking their 200-day line and hitting their best levels since early December. Amazon stock extended its market cap lead over Microsoft stock, which fell 1.8% Thursday.

Amazon stock has a 90 IBD Composite Rating out of a best-possible 99, a very good but not great score.

Deckers Earnings

Deckers earnings came in at $6.68 a share, blowing out views for $5.31. Revenue rose 8% to $873.8 million, well above forecasts for $827 million.

Shares of the footwear designer and distributor rose 4% to 133.56 late, though off overnight highs. That would push Deckers stock above an aggressive 132.33 entry. The stock also has a conventional buy point of 137.59.

Deckers stock has a 92 Composite Rating,

Trump Targets Drug Price Rebates

Health and Human Services proposed reining in rebates from drugmakers to pharmacy benefit managers if they’re not passed on to customers. The proposal comes days ahead of Trump’s State of the Union address on Tuesday. Targeting drug “kickbacks” will likely prove popular and bipartisan.

It’s not clear if this move will have much impact on drug prices or PBMs. CVS Health says 98% of these rebates go to customers. Investors could decide the Trump proposal is good news, as it’s a limited measure vs. more radical drug prices proposals.

CVS stock fell 2.4% in late trade. Cigna stock lost 1.4% and UnitedHealth stock 1%.

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