U.S. markets failed to rally Thursday morning despite news earlier this week that the U.S. economy grew by 4% in the second quarter. Dow Jones futures slipped 108 points (-0.64%), S&P futures were down 13.25 points (-0.67%), and Nasdaq futures were down 29.50 points (-0.74%).
News that weekly jobless claims rose to 302,000 are placing a drag on U.S. stock futures. With concerns about the labor market on the rise from investors and the Federal Reserve, all eyes will be on the U.S. employment report, set for release Friday morning.
Here's a roundup of the top stories to watch in the stock market today:
Dollar Devaluation: The nation of Argentina defaulted on bonds for the second time in 13 years last night, after the country was unable to obtain more time from a U.S. court or reach an agreement with bondholders by midnight last night. The markets seemed to have prepared for the event, which will reduce already non-existent credit for Argentine companies in the debt-strapped nation. The likely next step will be a further devaluation of the nation's currency.
- Banks Behaving Badly: Shares of France's largest bank BNP Paribas SA (OTCMKTS: BNPQY) were down marginally on news that the company's second-quarter net income rose 23%. BNP Paribas booked a $5.8 billion loss after it agreed to pay U.S. regulators roughly $8.9 billion in fines to settle charges that the company evaded economic sanctions in Iran, Sudan, and other barred economies. The stock is hovering near a 52-week low from Aug. 31.
- Earnings Beat: Shares of oil multinational Exxon Mobil Corp. (NYSE: XOM) were down 1.5% this morning, even though the company reported stronger than expected earnings. The company reported a 28% jump in quarterly profits thanks to rising prices in crude oil and natural gas. However, XOM slashed its production, and concerns are mounting over the company's strong commitment to production in Russia. Sentiment on Exxon is down on this decision as the United States and Europe continue to increase sanctions on the nation in the wake of rising geopolitical problems in Ukraine.
- Today's Economic Calendar: Today's schedule includes 419 companies reporting earnings, the EIA Natural Gas Report, U.S. jobless claims, the Fed balance sheet, and farm prices in the afternoon.
- Power Plug: Electric car manufacturer Tesla Motors Inc. (Nasdaq: TSLA) announced it has signed an agreement with Panasonic Corp. (OTCMKTS: PCRFY) to build a massive battery plant in the United States In what is being called the nation's first "Gigafactory," the facility will develop large quantities of low-cost advanced battery systems to meet rising demand for the car company's Model 3 over the next 10 years. According to multiple reports, the companies are deciding between multiple states in the West and Southwest to build the $5 billion facility, which will employ more than 6,000 workers. Tesla will report earnings today.
- Change at the Top: Shares of Target Corp. (NYSE: TGT) were down 1% in premarket trading on news that the company has announced its newest chief executive officer. The company named PepsiCo Inc. (NYSE: PEP) executive Brian Cornell to the leadership position, marking the first time in company history that it went outside the organization to appoint a new chief executive. Cornell steps in three months after the resignation of former CEO Gregg Steinhafel, who stepped down in the wake of a poor expansion strategy in Canada and a brand-damaging data breach that impacted millions of customers during the holiday shopping season.
- Earnings Reports: Stay tuned for earnings reports from Tesla Motors Inc. (Nasdaq: TSLA), Exxon Mobil Corp. (NYSE: XOM), Bunge Ltd. (NYSE: BG), ConocoPhillips (NYSE: COP), MasterCard Inc. (NYSE: MA), Occidental Petroleum Corp. (NYSE: OXY), Enterprise Products Partners L.P. (NYSE: EPD), Colgate-Palmolive Co. (NYSE: CL), DIRECTV (Nasdaq: DTV), Time Warner Cable Inc. (NYSE: TWC), Valeant Pharmaceuticals International Inc. (NYSE: VRX), and Kodiak Oil & Gas Corp. (NYSE: KOG).
Full U.S. Economic Calendar July 31, 2014 (NYSE: all times EDT)
- Challenger Job-Cut Report at 7:30 a.m.
- Gallup US Payroll to Population at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Employment Cost Index at 8:30 a.m.
- Chicago PMI at 9:45 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- Farm Prices at 3 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 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.