Good morning! Stock market futures today (Monday) indicate a market open 64 points lower than Friday's close. Markets rallied on Friday, but it wasn't enough to offset a very bad week that included multiple triple-digit losses. This morning's downturn was heavily tied to a poor earnings report from tech giant International Business Machines Corp. (NYSE: IBM).
The most important number to watch today - besides the Dow - is in China. Over the weekend, the Chinese central bank announced plans to pump 200 billion yuan ($32.6 billion) into the nation's financial system. With China expected to report a weakening economy when it releases its third-quarter GDP figure on Tuesday, the nation is attempting to boost its growth rate and beat back concerns about a slowing global economy.
Here's what else you should know to make your Monday profitable:
- Oil Prices Today: Oil prices were mixed this morning. November contracts for WTI crude oil sat at $82.80 per barrel, while Brent prices were down nearly 0.5% on the day to hit $85.77. Rising consumer sentiment figures were a boost to oil prices after last week's downturn.
Bad Beat: Shares of International Business Machines Corp. (NYSE: IBM) were down more than 6% in premarket hours after the tech giant announced a huge miss on quarterly earnings. Total revenues slid to $22.4 billion, down from $23.4 billion in the same quarter last year. On an adjusted basis, IBM earned $3.68 per share, far from the consensus expectations of $4.31. Finally, the company announced that it will pay GlobalFoundries $1.5 billion to take control of its semiconductor business. IBM had unsuccessfully attempted to sell the unit.- Another Slash: Shares of SAP SE (NYSE ADR: SAP) were down more than 4% this morning on news that the company slashed its 2014 earnings outlook. The German tech giant did report a 15% increase in quarterly profits, citing strong growth in its cloud-based services. However, a faltering European economy is looming over many large companies in the sector.
- Big Winner: Shares of Halliburton Co. (NYSE: HAL) rose more than 3% this morning on news that the oilfield services provider beat Wall Street quarterly estimates. The company reported earnings of $1.28 per share, besting expectations of $1.19 per share. The company also announced plans to increase its quarterly dividend to $0.18, a jump of 20%.
- Tomorrow's the Day: The Wall Street Journal reports that Yahoo! Inc. (Nasdaq: YHOO) will announce a number of cost-cutting initiatives tomorrow after the company faced increased pressure from activist investor Starboard. According to the report, the company may also use the $5.8 billion it gained from the Alibaba Group Holding Ltd. (NYSE: BABA) IPO to engage in a number of strategic acquisitions of one or more tech startups. Shares of Yahoo! were flat in premarket hours.
- The Big Split: Following the announcement that eBay Inc. (Nasdaq: EBAY) will spin off its lucrative PayPal unit, the company announced today that venture capitalist Marc Andreessen will be leaving its board. Andreessen has been a member of eBay's board for more than six years and has publicly battled activist investors like Carl Icahn over the pending split between eBay and PayPal. Shares of eBay were flat in premarket hours.
- Economic Calendar: Today's economic calendar features two speeches by Federal Reserve governors.
- Earnings Reports: Stay tuned for earnings reports from Rent-A-Center Inc. (Nasdaq: RCII), Potlatch Corp. (NYSE: PCH), Gannett Co Inc. (NYSE: GCI), Chipotle Mexican Grill Inc. (NYSE: CMG) Illumina Inc. (Nasdaq: ILMN) and Apple Inc. (Nasdaq: AAPL).
Full U.S. Economic Calendar October 20, 2014
- Federal Reserve Gov. Jerome Powell speaks at 10 a.m.
- 4-Week Bill Announcement at 11 a.m.
- 3-Month Bill Auction at 11:30 a.m.
- 6-Month Bill Auction at 11:30 a.m.
- Federal Reserve Gov. Daniel Tarullo speaks at 12 p.m.
What to Read Now: Investors are taught that bear markets can't occur unless short-term interest rates are higher than long-term interest rates. But that measure may be off the mark this time...
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.