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Today's financial news, May 2, 2014: This morning (Friday), the Bureau of Labor Statistics reported that the official U.S. unemployment rate fell from 6.7% to 6.3%, the largest single monthly drop since September of 2008.
The nation added 288,000 non-farm payroll jobs. The announcement also accompanied a number of revisions from February and March. Despite the drop, it's not all good news. The U.S. labor force declined by 806,000 participants, a record monthly decline since the Labor Department began keeping records.
U.S. markets were mixed on Thursday after a string of positive economic data improved the nation's outlook, despite higher weekly jobless claims.
Here's what you need to know to make your Friday profitable.
Five Biggest Stories in Today's Stock Market, May 2, 2014
- No Deal on Tap: On Friday, the board of AstraZeneca PLC (NYSE: AZN) rejected Pfizer Inc.'s (NYSE: PFE) extraordinary bid of $106 billion, arguing that its competitor is still significantly undervaluing its assets and operations. Pfizer is attempting to get access to its rival's best-in-class pipeline of cancer drugs and treatments.
- Don't Listen to This Bank: We've told you before to ignore Goldman Sachs Group's (NYSE: GS) advice and pay attention to what they are doing instead. Here's another fine example. Even though Goldman has been pushing Twitter Inc. (Nasdaq: TWTR) on investors since the stock hit its December peak, shares have plummeted by more than 50% in four months. And on Monday, the stock will come under even more pressure. That's because May 5 marks the day that the company's six-month "lockup" period will expire, allowing early investors to sell shares. In total, approximately 470 million shares will no longer carry post-IPO restrictions.
- Buffett Buys Again: Ahead of the company's annual shareholder meeting on Saturday, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) announced it will purchase AltaLink from SNC-Lavalin Group (TSE: SNC) for roughly $2.9 billion in cash. AltaLink is a regulated electricity transmission company based in Canada. This is yet another energy play that Buffett is making in Canada. To learn three other value picks in the energy markets, be sure to click here.
- Another Drug Deal: On Friday, the Food and Drug Administration will vote on whether to approve Singulair, Merck's (NYSE: MRK) prescription respiratory pill, for over-the-counter use. Singular was Merck's top-selling drug in 2011, bringing in more than $4.76 billion that year alone. However, the drug lost its patent protection in 2012, leaving its sales vulnerable to generic competition.
- Gas Prices May Plateau: Though gasoline prices are on the rise ahead of the summer driving season, there may be some good news for drivers. Booming U.S. oil production has driven the nation's crude oil inventories to almost 400 million barrels, the highest level since 1931. Reports indicated that the Bakken field has reached production of 1 billion barrels of crude oil in the first quarter. Given the slow growth in the U.S. at a time of high production, USA Today reports that there's little pressure to drive prices higher (for now). According to a report by the American Automobile Association, Americans would have had to pay an extra 40 cents per gallon this summer were it not for booming U.S. oil production.
Note: The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market - like triple-digit gains in just days - if you start with this strategy...
Full U.S. Economic Calendar May 2, 2014 (NYSE: all times EDT)
- U.S. Unemployment Rate at 8:30 a.m.
- Factory Orders at 10 a.m.
Key Companies Reporting Earnings May 2, 2014
- Consensus earnings per share for Chevron Corp. (NYSE: CVX) is $2.53.
- Consensus earnings per share for CVS Corp. (NYSE: CVS) is $1.05.
- Consensus earnings per share for TransCanada Corp. (NYSE: TRP) is $0.57.
- Consensus earnings per share for Marsh & McLennan Companies Inc. (NYSE: MMC) is $0.81.
- Consensus earnings per share for Sempra Energy (NYSE: SRE) is $0.94.
- Consensus earnings per share for Estee Lauder Companies Inc. (NYSE: EL) is $0.55.
- Consensus earnings per share for Southwestern Energy Co. (NYSE: SWN) is $0.63.
- Consensus earnings per share for Buckeye Partners L.P. (NYSE: BPL) is $0.95.
- Consensus earnings per share for Newell Rubbermaid Inc. (NYSE: NWL) is $0.32.
- Consensus earnings per share for Pharmacyclics Inc. (Nasdaq: PCYC) is $0.09.
- Consensus earnings per share for Gildan Activewear Inc. (NYSE: GIL) is $0.63.
- Consensus earnings per share for Pinnacle West Capital Corp. (NYSE: PNW) is $0.13.
NOW: "The markets are not rigged." Uh-huh. Here's how the SEC profits from high-frequency trading...
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.