Good morning!
The stock market today (Friday) continues to react positively to yesterday's GDP report that showed third-quarter growth at 3.5% - a sign of continued economic recovery. This morning, stock market futures are up on an announcement that the Japanese central bank will impose new stimulus measures. The news sent the Nikkei to a seven-year high.
Today, watch for earnings reports from several multinational oil companies. Additionally, the October end-month reading on consumer sentiment will be important. This survey tracks the economic confidence and financial conditions of U.S. households each month. The mid-month reading hit 86.4, its highest level since July 2007. A strong monthly reading would instill greater confidence among investors looking ahead into the fourth quarter - a crucial period for retailers.
Here's what else you should know - including our "Money Morning Tip of the Day" - in stock market news today:
- A Tech Company to Avoid: Shares of Groupon Inc. (Nasdaq: GRPN) jumped nearly 3.5% yesterday despite failing to report a profit, a feat the company hasn't done since Q2 2012. The online deal company reported a quarterly per-share loss of $0.03, worse than last year's per-share calculation of $0.00. For a stock that is down nearly 50% on the year, yesterday's earnings made something very clear to investors: Don't buy Groupon.
- Good Morning: After shares fell more than 5% after-hours Thursday, LinkedIn stock (NYSE: LNKD) is up nearly 10% in pre-market trading. The professional networking site delivered an earnings beat after the bell yesterday, but it also slashed guidance for next quarter. Here's how Money Morning Tech Specialist Michael A. Robinson recommends playing LNKD right now...
Shattered Earnings: Shares of GoPro Inc. (Nasdaq: GPRO) soared more than 15% in post-market hours yesterday after the camera manufacturer reported strong earnings and a surge in profits. GoPro checked in with adjusted quarterly profits of $0.12 per share, beating Wall Street expectations by $0.04. It reported strong product demand, particularly after the launch of its Hero4 camera line. But as we've been saying at Money Morning since the GoPro IPO, the story with this company is not its camera sales. There is another key figure that tells us more about GRPO as an investment...
- Joe on the Go: Shares of Starbucks Corp. (Nasdaq: SBUX) slipped nearly 4% in post-market hours despite hitting consensus earnings estimates of $0.74 per share right on the nose. The company failed to meet expectations in global comparable sales and revenue. During its conference call yesterday, SBUX's CEO outlined a plan to begin delivery service for food and beverages in select cities across the country in 2015.
- Big Beats: Shares of Chevron Corp. (NYSE: CVX) jumped more than 1.5% this morning on news the company reported stronger-than-anticipated earnings. CVX reported per-share earnings of $2.95, beating consensus estimates of $2.55. With oil prices declining, the company will remain in focus over the coming years, as it has planned five major projects to boost its annual production levels by 20% by 2017. Meanwhile, shares of its rival Exxon Mobil Corp. (NYSE: XOM) were up more than 1.3% this morning after reporting earnings of $1.89 per share. Although the company's oil and gas production slipped by nearly 5%, Exxon reported strong profits in its refining and chemicals businesses.
- Easy Money: U.S. futures and European markets surged this morning after Japan's central bank announced it will engage in widespread stimulus efforts to stave off deflationary pressures. The Bank of Japan announced plans to hike purchases of government bonds, increase ownership in long-term bonds, and inject capital into stock index funds and real estate trusts. Money Morning Chief Investment Strategist Keith Fitz-Gerald has long said that central bankers have never found a printing press that they didn't like. Sure enough, the markets love it when those gears crank up...
- Oil Prices Today: Oil prices slipped again this morning as the dollar continues to strengthen and oversupply remains a key concern for the markets. Brent crude, the global benchmark priced in London, fell 1.1% to hit $85.27 this morning. Meanwhile, WTI crude, priced in Manhattan, fell 0.9%, slipping to $80.35 per barrel. Unless a sharp reversal happens this afternoon, oil markets will have seen their deepest decline since 2012.
- Economic Calendar: Today's economic calendar features an update on consumer sentiment, the Employment Cost Index, and monthly farm prices.
- Earnings Reports: Stay tuned for earnings reports from AbbVie Inc. (NYSE: ABBV), The Clorox Co. (NYSE: CLX), Dominion Resources Inc. (NYSE: D), NuStar Energy LP (NYSE: NS), and Legg Mason (NYSE: LM).
Full U.S. Economic Calendar October 31, 2014 (NYSE: all times EDT)
- Personal Income and Outlays at 8:30 a.m.
- Employment Cost Index at 8:30 a.m.
- Chicago PMI at 9:45 a.m.
- Consumer Sentiment at 9:55 a.m.
- Farm Prices at 3:00 p.m.
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.