Dow Jones today, June 10, 2014: The Dow Jones Industrial Average hit another record on Monday, while the S&P 500 rose even closer to the 2,000 level. Markets are still reacting positively to last week's jobs report and expected stimulus measures by the European Central Bank. Despite the strong uptick, U.S. futures are indicating a retreat this morning from record levels.
A Tough Road Ahead: U.S. auto giant General Motors Co.(NYSE: GM) kicks off its annual shareholders meeting this morning in Detroit. The company has already enacted more than two dozen automotive recalls this year, drawing a lot of attention and criticism over the company's safety record. Numerous reports state that protestors will gather to demand answers over the company's faulty ignition switches that caused at least 13 deaths.
The Death of Retail: Shares of Radioshack Corp. (NYSE: RSH) slipped another 9% in pre-market trading this morning after the company reported another decline in same-store sales. More consumers continued to purchase electronics online and consumer traffic slumped again, leading to the fiscal first-quarter loss. Overall, Radioshack reported a sales decline of 14%. The company has closed 22 stores this year, with 200 more closings planned for the full fiscal year.
American Journalism Returns: Time Warner Cable Inc. (NYSE: TWC) may purchase up to a $1 billion stake in Vice Media. The deal, first reported in The New York Times, would provide Vice Media (which currently runs a show on HBO) access to the television network HLN (Headline News). The deal does face roadblocks, as Time Warner would need to buy out a 5% equity stake in Vice by 21st Century Fox(NYSE: FOXA).
A New Home for the Russell 2000: The Financial Times reports that the London Stock Exchange Group is very close to purchasing Russell Investments for nearly $2.8 billion. The British company would significantly increase its presence in the United States by obtaining the American index compiler and asset manager.
What Stock Bubble: Internet host and famed Super Bowl advertiser GoDaddy Inc. officially filed for its initial public offering. The company aims to raise nearly $100 million to pay off debts and meet other corporate obligations. GoDaddy has struggled to remain profitable. The company reported a loss of $199.9 million for 2013, although revenue increased by 24%. The company is the largest provider of website domain names with a little more than 12 million customers.
Today's Economic Calendar: A light schedule features the weekly ICSC-Goldman Store Sales Index and the JOLTS report.
Baby Boomer Beckons: According to research house Cerulli Associates, the U.S. 401(k) pension system is set to go cash-flow negative in 2016. The research company expects the $3.5 trillion system to see contributions fall below withdrawals as baby boomers retire, fewer younger Americans maintain strong enough jobs to drive contributions, and struggling Americans continue to use their 401(k) as a source of revenue. The trend will also hinder asset managers and stock purchases due to deposit downturn.
Volatility Watch: The CBOE Volatility Index, which traditionally runs inverse to the S&P 500 performance, is near a seven-and-a-half-year low. Still, on Monday, the Index increased by 3.9%, even though the S&P is at a record-high level. Markets are calmer than in any decade, as central bank intervention has driven interest rates to historic lows and stock prices to all-time highs.
Earnings Reports: Stay tuned for earnings reports from Francesca's Holdings Corp. (Nasdaq: FRAN), Oxford Industries Inc.(NYSE: OXM), Christopher & Banks Corp. (NYSE: CBK), Cherokee Inc. (Nasdaq: CHKE), Burlington Stores Inc.(NYSE: BURL).
Full U.S. Economic Calendar June 10, 2014
NFIB Small Business Optimism Index at 7:30 a.m.
ICSC-Goldman Store Sales at 7:45 a.m.
Redbook at 8:55 a.m.
JOLTS at 10 a.m.
Wholesale Trade at 10 a.m.
4-Week Bill Auction at 11:30 a.m.
3-Yr Note Auction at 1 p.m.
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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.