With the European Central Bank pulling out the biggest bazooka yet in terms of monetary policy, the Dow Jones Industrial Average was expected to resume its sugar high. But it turns out the ECB will walk away from any further rate cuts, meaning that Uncle Sugar is making his attempt at spurring economic growth on the back of savers. That means, when this round of stimulus doesn't work in the long run - just like the last few rounds have failed to provide the desired results - the ECB will have to make a decision...
The central bank - like many others - will need to either admit it's time to engage in badly needed structural reform, or they will turn to another form of stimulus, such as direct injections of cash into an economy through Keynesian experiments like infrastructure spending. Expect the latter... and prepare to profit off the next misadventure in centralized planning by investing in this ETF.
Anyway, here's the other big news from Thursday, March 10, 2016.
Check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 16,995.13; -5.23; -0.03%
S&P 500: 1,989.57; +0.31; +0.02%
Nasdaq: 4,662.16; -12.22; -0.26%
Now, here's the top stock market news today...
DJIA Today: ECB Ends Rate Cuts, Amazon Airs It Out, and Jobless Claims Fall
First up, oil prices were down as traders can't decide whether oversupply concerns are more important in the short term than recent data indicating a rise in demand. The ECB's massive stimulus plan didn't really move the needle for energy commodities, but concerns about Iran's participation in an OPEC production freeze does worry many about the impact on prices. WTI prices slipped 1.2% to $37.84, while Brent crude fell 2.5% to $40.05.
On the economic front, weekly jobless claims hit a five-month low, according to the U.S. Labor Department. The ongoing decline in jobless claims and last week's strong jobs report would provide the U.S. Federal Reserve with further ammunition to increase interest rates next week.
Look out FedEx Corp. (NYSE: FDX) and United Parcel Service Inc. (NYSE: UPS), there's a new cargo giant on the horizon. This afternoon, news broke that Amazon.com Inc. (Nasdaq: AMZN) has leased 20 cargo planes for at least five years from Air Transport Services Group Inc. (Nasdaq: ATSG).
But the big talk today was about Mario Draghi and the European Central Bank's decision to test the stability and sanity of the global financial sector. The ECB slashed interest rates to zero, increased its already massive asset-buying plan by 33% each month, moved the deposit rate down another 33%, and punished anyone who isn't now stashing their money in the walls or mattress. But the markets didn't like the news that the central bank is done with rate hikes. It also didn't like how the ECB failed to introduce a two-tiered banking system that would encourage lending and punish banks for holding too much capital.
Now, let's look at the day's biggest stock movers and today's must-own stock...
Top Stock Market News Today
- Shares of Dollar General Corp. (NYSE: DG) gained 10.6% after the nation's second-largest discount retailer shattered fourth-quarter earnings expectations and hiked its quarterly dividend by $0.03. The news pushed shares of rival Dollar Tree Inc. (Nasdaq: DLTR) up more than 4%.
- Apple Inc. (Nasdaq: AAPL) has announced plans for a company event on March 21. Wall Street anticipates Apple will release a newer, smaller iPhone that can help it compete in China and other developing nations, where price is a critical sales consideration.
- Shares of Expedia Inc. (Nasdaq: EXPE) popped 3.5% on news that investment bank Piper Jaffray has upgraded the stock and boosted its price target from $130 to $140. The bank cited the firm's recent purchase of HomeAway as a strong potential source of financial growth for the boost.
- Things are getting more and more desperate at Twitter Inc. (NYSE: TWTR), according to a report from The Wall Street Journal. The financial newspaper reports the firm is doling out restricted stock and cash bonuses in order to keep its top human talent from walking out the door.
- Finally, here is your must-own stock pick of the day. With so much uncertainty in the markets and concern about a recession weighing down the sentiment of traders from New York to Shanghai, investors need to know what to do with their money. But don't shove cash into a mattress or into a savings account paying 0.1%. Keep your money in the market by owning stocks that tap into trillions of dollars of spending (no matter what the market is doing) and make them as recession-proof as possible. And there's one sector that you want to be a part of when uncertainty reigns: Own this stock in this sector.
Oil prices have suffered one of the worst crashes in modern history. But WTI prices have rebounded by nearly 30% over the last month, and there's one reason why they'll keep going higher in 2016 and beyond...
What Investors Must Know This Week
- These Four Charts Have Every Wall Street Pro Worried
- Grab Double-Digit Gains with This Tech Overachiever
- The One "Investment" You Can't Afford to Be Without
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.