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Good morning! Futures forecast a slight decline in the stock market today from yesterday's close despite positive momentum for European and Japanese stocks. The S&P 500 closed at another record high on Monday. This morning, German analyst and investor sentiment saw its first monthly increase in nearly one year.
What to watch today: expect the markets to react to an important set of earnings reports and increased focus on the Japanese economy. After Japan reported it has entered a recession, its Prime Minister Shinzo Abe announced the nation will delay a national sales tax increase from 2015 to 2017. The country will also hold elections in December and begin its own massive quantitative easing program. Be sure to read the best way to play Japan's declining currency and struggling economy, and check out these recommendations right here.
Here's the other U.S. stock market news to watch – including your "Money Morning Tip of the Day" – to make it a profitable Tuesday:
- Keystone Problems: A Senate bill to pass approval for the Keystone XL pipeline is currently stuck on 59 votes, according to the Associated Press. A current vote tally indicates that 14 Democrats have joined 45 Republicans to declare support for the project. A vote could come as soon as Tuesday afternoon. The pipeline would carry 830,000 barrels of crude oil each day from Alberta, Canada to the U.S. refinery network along the Gulf of Mexico. However, democratic senators and President Barack Obama have held it up for six years.
- Poll Position: Automotive giant Toyota Motor Corp. (NYSE ADR: TM) announced plans to begin sales of a fuel-cell car in Japan by December. It also plans to expand sales internationally to Europe by mid-2015. With Japan prepared to pump money into its economy and Toyota taking a lead in new technologies, Toyota has become a favorite play for our Chief Investment Strategist Keith Fitz-Gerald. Click here to learn why owning this stock can put you in the driver's seat for strong profits heading into 2015.
- Home Improvement: Shares of The Home Depot Inc. (NYSE: HD) dipped 0.7% in pre-market hours despite reporting stronger-than-expected quarterly earnings. The company beat consensus estimates of $1.13 for the quarter, instead tallying per-share earnings of $1.15. The company cited improvements in the U.S. job market and increased renovation spending by property owners for its positive report. Nevertheless, HD is still reeling from a data breach last year. It's one of the reasons why a new cybersecurity ETF, which we profiled at Money Morning yesterday, debuted last week.
- Merger Mania: First, it was oil field services. Now merger activity is heating up in the wind power market. According to reports, SunEdison Inc. (NYSE: SUNE) and its clean energy subsidiary, TerraForm Power Inc. (Nasdaq: TERP) are partnering to purchase First Wind. The company develops and operates wind farms. The deal would be for $2.4 billion. SunEdison has evolved into one of the largest solar turbine companies in the United States. With this deal, the company now has a firm entry path into the wind-turbine business. Shares of SUNE jumped more than 10% in pre-market hours.
- Playing Defense: A day after purchasing a $255 million portfolio of assets from Abbott Laboratories (NYSE: ABT), animal health giant Zoetis Inc. (NYSE: ZTS) announced a $500 million stock buyback program. The stock was up another 1.5% this morning on the news. Zoetis has been playing defense recently in an effort to deter a hostile takeover from activist investor Bill Ackman, who now owns an 8.5% stake in the company.
- Economic Calendar: Today's economic calendar features the weekly ICSC-Goldman Store Sales report, the NAHB U.S. Housing Market Index, the PPI-Final Demand report, and the Redbook.
- Oil Prices Today: Global oil prices were down slightly this morning, although speculators are heating up to the news of possible supply cuts. Brent crude traded near $79 per barrel on speculation that OPEC could slash output during a Nov. 27 meeting. Cartel member Venezuela has called for greater cooperation among members and nations like Russia, which is a nonmember, to provide a support price. U.S. futures for WTI crude slid another $0.10.
- Earnings Reports: Stay tuned for earnings reports from Medtronic Inc. (NYSE: MDT), Dick's Sporting Goods Inc. (NYSE: DKS), Concur Technologies Inc. (Nasdaq: CNQR), Jack In The Box Inc. (Nasdaq: JACK), and Home Depot Inc. (NYSE: HD)
Full U.S. Economic Calendar Nov. 18, 2014
- ICSC-Goldman Store Sales at 7:45 AM ET
- PPI-FD at 8:30 a.m.
- Redbook at 8:55 a.m.
- Housing Market Index at 10 a.m.
- E-Commerce Retail Sales at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- Treasury International Capital at 4 p.m.