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Dow Jones today, October 8, 2014: The Dow Jones Industrial Average slumped heavily Tuesday after renewed concerns about global growth reemerged and investors took money off the table ahead of earnings season. The sharp sell-off was led by cyclical stocks, which are typically tied to the pace of economic growth.
Investors will be anxious today to review the U.S. Federal Reserve's Federal Open Market Committee minutes from the central bank's September meeting. The report, which will be released today at 2 p.m., might offer some insight into the central bank's plans to raise interest rates. Yesterday, Federal Reserve Bank of New York President William Dudley said the Fed can likely wait until mid-2015 before it raises short-term interest rates.
Commodity prices continue to struggle. Brent crude oil, which is priced in London, slipped to $92.11 per barrel, the lowest level since June 2012. West Texas Intermediate crude oil, which is priced at the New York Mercantile Exchange, dipped 1.7% to finish Tuesday at $88.85. This is the lowest contract level since April 2013. Gold and silver prices were both up on the day, rebounding from recent one-year lows.
Meanwhile, the S&P Volatility Index (VIX) soared more than 10% on Tuesday.
Here's what else you should know to make your Wednesday profitable:
- Global Troubles Continue: The International Monetary Fund slashed its global economic growth forecasts for the third time this year. In a report released yesterday, the IMF said that 2014 global growth will come in around 3.3%, while GDP growth in 2015 will be 3.8%. The D.C.-based agency said that weaker growth is being experienced in large emerging markets like Russia and Brazil, as well as all across the Eurozone. The IMF has asked richer nations to offer support and increase spending on public investments to maintain the ongoing recovery.
- Auto Slump: Shares of General Motors Co. (NYSE: GM) saw shares dip by more than 5% after the company received a downgrade from investment bank Morgan Stanley (NYSE: MS) on Tuesday. The company also announced plans to recall more than 7,500 police vehicles over a transmission problem. This marks the 75th auto recall by General Motors in 2014, totaling more than 30 million vehicles.
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.