The Dow Jones Industrial Average today (Friday, Aug. 26) turned negative as traders prepare for Federal Reserve Chair Janet Yellen's speech on monetary policy at 10 a.m. Investors are looking for any clues into the timing of the next interest rate hike by the central bank.
The annual U.S. Federal Reserve meeting kicked off yesterday (Thursday) in Jackson Hole, Wyoming. The meeting will conclude today. Of course, one has to remember that this meeting consists of central bankers who have engaged in reckless policy experimentation for decades. If the United States wants to restore sanity to its economy, here's how the nation can end the Federal Reserve and replace this scheming central bank.
On Thursday, the Dow Jones slipped 33 points after two more members of the Federal Reserve argued the case for an interest rate hike in the coming months
Let's take a look at yesterday's stock market numbers:
Dow Jones: 18,448.41; -33.07; -0.18%
S&P 500: 2,172.47; -2.97; -0.14%
Nasdaq: 5,212.20; -5.49; -0.11%
The real story behind today's central banking symposium is the ongoing rush of countries to drop interest rates into negative territory. That's forcing a lot of different entities to purchase negative-yield bonds. Rather than buy debt, Money Morning Global Credit Strategist Michael Lewitt recommends that you buy this alternative investment instead.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projects an 11-point decline as investors prepare for today's speech by Fed Chair Janet Yellen. Markets still appear unconvinced the central bank is going to raise interest rates in the near term. According to CME FedWatch, the probability of a rate hike in September sits at a slim 24%. Odds of a move in November stand at 28%. For December, they're 43%. Here's everything you need to know about this week's Fed meeting.
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Oil prices were sliding today after Saudi Arabia's energy minister dampened expectations that OPEC will be able to agree on a production freeze. Energy Minister Khalid Al-Falih said last night his country doesn't think that "significant intervention" in global oil markets is required right now. Money Morning Global Energy Strategist Dr. Kent Moors told readers two weeks ago a deal wasn't going to get done, but it wasn't for the reason that Saudi Arabia is projecting. Find out the real reason why this production freeze won't happen, right here.
This morning, the WTI crude price was off 0.3%, while Brent crude slid 0.5%.
The silver spot price per ounce is down roughly 5% over the last five sessions. The price decline comes as Janet Yellen's prepares to deliver her highly anticipated speech. With silver prices falling, now might be a perfect buying opportunity. We provide our latest 2016 silver forecast, right here.
But the big story today is the battle of hedge fund managers over Herbalife Ltd. (NYSE: HLF). Bill Ackman and Carl Icahn are back in the news on word that the latter sold his $1 billion stake in the health marketing company. Shares of HLF stock are off nearly 6%. The two billionaire hedge fund managers have been engaged in a public battle over the future of the company. Ackman has been shorting the company - long convinced that the firm's marketing program can be classified as a "Ponzi Scheme." Icahn held a long position. This morning, Ackman said investment bank Jeffries Group approached him to buy a stake in Herbalife.
Now, here are the biggest stocks to keep an eye on today, including one of the most controversial companies in the pharmaceutical industry right now...
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Stocks to Watch Today, Aug. 26, 2016
- In earnings news, shares of Big Lots Inc. (NYSE: BIG) added nearly 2% after the company beat Wall Street quarterly profit expectations. The firm reported an EPS of $0.52, topping analyst expectations of $0.45. However, the firm did fall slightly short of revenue expectations. No other major U.S. companies report earnings on Friday.
- Shares of drug maker Mylan NV (Nasdaq: MYL) are still falling after the company responded to congressional pressure to explain its planned price increase of the allergy treatment known as EpiPen. The firm has suffered a massive PR problem after announcing plans to increase the price to $500 per treatment. The company announced it will offer some cost relief to certain patients. Even Democratic presidential candidate Hillary Clinton took time to condemn the firm's decision, a statement that helped push the stock down 5.4% on Wednesday.
- Speaking of Hillary Clinton, the former secretary of state went on the attack this week after arguing that her rival Donald Trump's campaign had been hijacked by the "alt-right." So, what is this "alt-right" and how might it affect the election? We answer that question, right here.
Today's U.S. Economic Calendar (all times EDT)
- GDP at 8:30 a.m.
- International Trade in Goods at 8:30 a.m.
- Corporate Profits at 8:30 a.m.
- Consumer Sentiment at 10 a.m.
- Federal Reserve Chair Janet Yellen speaks at 10 a.m.
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 p.m.
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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.