Stock market today, October 27, 2014: The stock market today (Monday) is showing signs of retreating after its best week of 2014. Stock market futures indicate a market open 68 points lower than Friday's close. The markets are turning downward on continued weakness in the Eurozone and on news that Brazilian President Dilma Rousseff won re-election in a Sunday runoff vote.
The most important number to watch today - besides the Dow Jones - is 103.2, the level of this morning's report on German business confidence, released by the Ifo Institute. This is the sixth consecutive miss of this leading indicator for the German economy, and suggests that the Eurozone's largest engine is struggling to get back on track after a second-quarter contraction. The 103.2 reading was well below analyst projections of 104.5. With additional problems plaguing the Eurozone economy, including a large percentage of banks failing the European Central Bank's recent stress tests, these jitters could affect confidence in global markets.
Here's what else you should know - including your Tip of the Day - to make your Monday profitable:
- Losing at Its Own Game: It appears that Apple Inc. (Nasdaq: AAPL) is already losing at its own game with Apple Pay, its digital payment service launched last week. On Thursday, drug store giant Rite Aid Corp. (NYSE: RAD) halted the acceptance of payments through the payment system, according to The New York Times. Over the weekend, the chain's rival CVS Health Corp. (NYSE: CVS) also stopped using the service as well, according to multiple reports. The New York Times speculated that both companies may have eliminated Apple Pay in favor of their own proprietary technology that may be under development. Shares of Apple were down marginally in pre-market hours after closing at a post-split record high on Friday.
- Merger Mania: Shares of Allergan Inc. (NYSE: AGN) were up more than 1.5% in pre-market hours on news that company posted strong third-quarter earnings and is likely to receive a higher takeover bid. Allergan posted adjusted per-share earnings of $1.78, besting Wall Street expectations by a dime. Meanwhile, Valeant Pharmaceuticals (NYSE: VRX) announced it is willing to increase its offer to at least $200 per share for the Botox manufacturer.
- Preventing an Outbreak: Shares of biopharmaceutical company Novavax Inc. (Nasdaq: NVAX) jumped more than 11% in pre-market hours this morning. The company announced plans to begin a phase 1 clinical trial for an Ebola vaccine in December.
- Stressful Work: On Sunday, the European Central Bank released a report stating that 25 of 140 banks in the Eurozone have failed the central bank's stress tests. In addition, the ECB's President Mario Draghi told Eurozone leaders that the world's largest economic bloc is at risk of a "relapse into recession" if structural economic reform wasn't enacted soon. German Chancellor Angela Merkel, who heads the bloc's largest economy, cheered the news. This is the latest problem for the Eurozone that many in the media have ignored for too long. Of course, our Shah Gilani began exposing problems in both the U.S. and European financial sector back in 2012.
- Oil Prices Today: Oil prices slumped this morning on news that Goldman Sachs Group Inc. (NYSE: GS) slashed its price outlook for Brent crude oil. Brent crude, the global benchmark priced in London, slipped more than 1% to his $85.18. Meanwhile, WTI crude, priced in New York City, slipped 0.9% to hit $80.26. The bank said it expects Brent crude prices to fall as low as $80 in Q2 2015, while it expects WTI prices to dip as low as $70.
- Tip of the Day: With markets showing the roughest patch of volatility in 20 years, investors must ask themselves one question: "Should I be in the markets right now?" That's the question that our Chief Investment Strategist Keith Fitz-Gerald tackled for Money Morning readers this morning. With more than 33 years navigating global markets, Fitz-Gerald has seen it all. He explains today that there are always sound stocks and companies to own in any market condition...
- Economic Calendar: Today's economic calendar features the Dallas Fed Manufacturing Survey, the Pending Homes Sales Index, and PMI Services Flash.
- Earnings Reports: Stay tuned for earnings reports from T-Mobile US Inc. (NYSE: TMUS), Old National Bancorp (NYSE: ONB), Navios Maritime Partners LP (NYSE: NMM), Merck & Co Inc. (NYSE: MRK), Eastman Kodak Co. (NYSE: KODK), Cheniere Energy Partners LP (NYSE: CQP), and Caesars Entertainment Corp. (Nasdaq: CZR).
Full U.S. Economic Calendar October 27, 2014
- PMI Services Flash at 9:45 a.m.
- Pending Home Sales Index at 10 a.m.
- Dallas Fed Manufacturing Survey at 10:30 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.
Today's Big News: With the volatility in today's markets, as well as the two crashes since the turn of the century, it's no wonder that so many people are afraid to enter the stock market. Here's why you should be in the stock market right now...
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.