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Today's stock market news, Feb. 3: U.S. markets slumped on Friday and posted their worst month since May 2012.
The Dow Jones Industrial Average tumbled 4.88% in January. Last week, mixed earnings from retail and tech giants collided with renewed concerns about emerging markets and production declines in China.
With our eye on the Opening Bell, here are five stories to watch this morning.
Five Biggest Stories in Today's Stock Market, Feb. 3
- Unleash the Yellen: At 9 a.m., the nation will officially swear in Federal Reserve Vice Chair Janet Yellen to succeed Ben Bernanke. Yellen is the first woman to lead the U.S. central bank in its 100-year history. Her first task is to unwind five years of unprecedented stimulus actions by Bernanke's Fed while directing the unemployment rate south of 6%. This Friday's jobs report will be one of the most anticipated releases in recent memory.
- China's Prospects Weaken: Concerns about emerging markets turmoil continued Monday morning, and investors are prepping for another week of mixed reports and earnings. Analysts in China are reeling from a new report that shows the official Purchasing Managers' Index fell to 50.5 in January. Many have excused the decline in the all-important report by attributing it to the Lunar New Year holiday, which began last week. This will only place greater interest in February's PMI level moving forward.
- Keystone Politics Divide Washington: On Friday, the U.S. State Department released a highly anticipated report stating the Keystone pipeline's construction would not have a significant environmental impact. The pipeline's creation has faced delays for nearly five years, while the Obama administration awaits input from several federal agencies. Keystone has become a political football for both parties on issues like jobs, energy independence, and environmental action. Conventional wisdom states U.S. President Barack Obama will ultimately approve it, but Washington insiders don't expect a decision until after the 2014 election. Meanwhile, shares of TransCanada Corp. (NYSE: TRP), the company behind Keystone, rose on Friday and again in Monday pre-market trading.
- Look at Their Campaign Donors: Bloomberg reported over the weekend that a deal in the Senate to determine the future of mortgage giants of Fannie Mae and Freddie Mac is fading fast. The news outlet says that Senate Democrats have been unable to find common ground on a range of issues including loan guarantees and the bill's expanding scope. Investors like Paulson & Co. and Fairholme Capital Management LLC are going to have to wait until after the 2014 elections to learn the fate of their financial stakes in both nationalized companies.
- The Suit Wars Continue: In an effort to stave off a proposed takeover of its company, Jos. A. Bank (Nasdaq: JOSB), has allegedly entered talks to purchase retailer Eddie Bauer. For several months, Jos. A Bank engaged in a bizarre bidding war with Men's Wearhouse (NYSE: MW), in which both companies bid to purchase the other. The Wall Street Journal has reported that Jos. A Bank could purchase Eddie Bauer for as much as $1 billion. Shares of Joseph Bank were down more than 5% in pre-market trading.
U.S. Economic Calendar Feb. 3
Today's U.S. economic calendar features the January ISM Index and December construction spending figures at 10 a.m. Truck and auto sales are set for 2 p.m.
Key Companies Reporting Earnings Feb. 3
- Consensus earnings per share for UGI Corp. (NYSE: UGI) is $1.08.
- Consensus earnings per share for Yum! Brands Inc. (NYSE: YUM) is $0.80.
- Consensus earnings per share for First Bancorp. (NYSE: FBP) is $0.11.
- Consensus earnings per share for SYSCO Corp. (NYSE: SYY) is $0.40.
Others Reporting Earnings
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.