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Financial news today, May 7, 2014: Major indices slipped on Wednesday on news that the OECD cut its 2014 global forecast for growth by 0.2%.
U.S. Federal Reserve Chair Janet Yellen will testify before the Joint Economic Committee of Congress this morning at 10 a.m. On Thursday, Yellen will appear before the Senate Budget Committee.
Here's what you need to know to make your Wednesday profitable.
Five Biggest Stories in Today's Stock Market, May 7, 2014
- It's Finally Here: Yesterday (Tuesday), Alibaba Group, China's largest e-commerce company, filed for a U.S. IPO valued up to $1 billion. Expectations for the IPO are extremely high, and the company could easily become the largest tech debut in market history, surpassing Facebook Inc. (Nasdaq: FB) at $16 billion. With an expected market cap above $200 billion, the opening valuation will likely range between $16 billion and $20 billion. Yahoo! Inc. (Nasdaq: YHOO) owns 24% of the company and will sell one-third of its holdings during the IPO, according to a previous agreement.
- Social Media Slump: Shares of Twitter Inc. (Nasdaq: TWTR) crashed more than 17% and hit an all-time low on Tuesday. Yesterday marked the 180-day lock-up expiration period and allowed insiders to sell shares for the first time. Shares of Twitter were up by 1.1% in pre-market trading.
- The Cloud Boom Continues: Shares of Hewlett-Packard Co. (NYSE: HPQ) ticked up marginally in premarket earnings on news that the company is prepared to jump feet first into the cloud-computing market. In the next two years, HP will invest more than $1 billion to develop and sell cloud-computing services. The company's strategy also includes the development of 20 new data centers by the end of 2015.
- More Trouble for Bill Gross: Though most of the bad news has centered on the rift between founder Bill Gross and former CEO Mohamed El-Erian and record outflows from its Total Return Fund, the new problem for PIMCO is its recent massive losses in emerging markets. Poorly timed positions on debt markets in Brazil, Mexico, and Russia have led to increased capital outflows from its funds and embarrassing losses. According to Morningstar data, investors have yanked nearly $2 billion from Pimco's emerging markets debt funds in the first four months of 2014, with 31.5% of that total in April alone. That total matches the entire outflow for these funds in all of 2013.
- High-Frequency Freak Out: The Senate agriculture committee announced plans to discuss high-frequency trading in the futures market on May 13. Though the U.S. Senate has yet to approve him, Timothy Massad, nominee as new chairman of the Commodity Futures Trading Commission, and two other commission nominees have called for this discussion.
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 7, 2014 (NYSE: all times EDT)
- MBA Purchase Applications at 7 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Productivity and Costs at 8:30 a.m.
- Federal Reserve Chair Janet Yellen speaks at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Global Composite PMI at 11 a.m.
- Global Services PMI at 11 a.m.
- 10-Yr Note Auction at 1 p.m.
- Consumer Credit at 3 p.m.
Key Companies Reporting Earnings May 7, 2014
- Consensus earnings per share for Tesla Inc. (Nasdaq: TSLA) is $0.33.
- Consensus earnings per share for Whole Foods Market (NYSE: WFM) is $0.33.
- Consensus earnings per share for Mondelez International Inc. (Nasdaq: MDLZ) is $0.33.
- Consensus earnings per share for Devon Energy Corp. (NYSE: DVN) is $1.26.
- Consensus earnings per share for Chesapeake Energy Corp. (NYSE: CHK) is $0.47.
- Consensus earnings per share for Humana Inc. (NYSE: HUM) is $1.94.
- Consensus earnings per share for Spectra Energy Corp. (NYSE: SE) is $0.50.
- Consensus earnings per share for Perrigo Co. (Nasdaq: PRGO) is $1.53.
- Consensus earnings per share for Allergan Inc. (NYSE: AGN) is $1.12.
- Consensus earnings per share for AOL Inc. (NYSE: AOL) is $0.45.
- Consensus earnings per share for Spectra Energy Partners, LP (NYSE: SEP) is $0.66.
- Consensus earnings per share for Hertz Global Holdings Inc. (NYSE: HTZ) is $0.10.
- Consensus earnings per share for Duke Energy Corp. (NYSE: DUK) is $1.10.
- Consensus earnings per share for Enbridge Inc. (NYSE: ENB) is $0.53.
- Consensus earnings per share for Cognizant Technology Solutions Corp. (Nasdaq: CTSH) is $0.55.
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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.