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Good morning! U.S. stock futures for Wednesday, Nov. 19, forecasted a 17-point decline from yesterday's close ahead of today's release of minutes from the most recent meeting of the Fed Open Market Committee (FOMC) and an important report on U.S. housing construction.
Yesterday, the S&P 500 had its 43rd record close of the year, while the Dow Jones Industrial Average managed its 26th yearly record.
Today, expect the markets to react to minutes released from the October meeting of the Fed Open Market Committee and a slew of important retailer earnings reports. The minutes, slated for release at 2:30 p.m. EST, will offer greater insight into the central bank's timeline on a possible interest rate hike and other areas of monetary policy. The last time that the Fed released minutes, the Dow surged to its best trading day of the year. Investors will also keep an eye on U.S. housing markets with the October report on housing starts. Figures on U.S. housing starts have been volatile since the summer months, with starts rebounding in September after an August decline and July gain. The report will have an impact today on homebuilding stocks.
Here's what else you should know about the stock market today - including your "Money Morning Tip of the Day" - to make it a profitable Wednesday:
- Retail Surge: Shares of Target Corp. (NYSE: TGT) and Lowe's Companies Inc. (NYSE: LOW) jumped 3.1% and 4.3% respectively this morning on strong earnings reports and sales outlooks. This morning, Target said it beat third-quarter profit estimates on strong back-to-school and Halloween sales. The company is currently in the middle of a turnaround, and will likely open this morning at a 52-week high. Meanwhile, Lowe's will also open at a 52-week high on news that the home improvement retailer raised its full-year sales growth outlook up to a range of 4.5% to 5%. The firm said that its net sales from the same period in 2013 increased by 5.6%.
- Keystone Crumbles: Tuesday evening's Senate vote to approve the completion of the Keystone XL Pipeline stalled on 59 votes, failing to pass in the Upper Chamber of Congress. Senator Mary Landrieu (D-La.), who has been working to ensure the project's approval to protect her seat in a runoff election next month, is now likely to be at the end of her political career. With Republicans prepared to take control of the Senate in January, another vote is likely in the coming months. However, President Barack Obama has said he will likely veto the bill despite strong approval for its completion in Congress and with the American people. Shares of TransCanada Corp. (NYSE: TRP), which would own and operate the pipeline, slipped more than 1% in pre-market hours.
- Flash Crash: It appears that shares of The Home Depot Inc. (NYSE: HD) experienced a flash crash yesterday. The New York Stock Exchange said it was canceling all trades of the stock below $93.33 yesterday between 3:55 pm and 3:56 pm. During the drop, currently blamed on a fat finger, Home Depot shares slumped to $86.52. Minutes later, the stock bounced back to close at $95.98. Despite the rebound, the markets were less than impressed with the home retailer after it reported stronger-than-expected earnings, but lower profits than expected. Shares fell by a little more than 2% on the day. So, should you buy Home Depot stock after yesterday's downturn? Our Michael A. Robinson explored your options during an interview with FOX Business' "Varney & Co." yesterday. Click here for his expert insight.
- Merger Mania: A day after the discount retailer's stock hit an all-time high, the New York Post reports that Dollar General Corp. (NYSE: DG) will likely need to sell more than 4,000 stores to complete its acquisition of Family Dollar Stores Inc. (NYSE: FDO). The divestiture would be needed to gain approval from the U.S. Federal Trade Commission. The 4,000 figure is significantly more than the original estimate of 1,500 stores that would need to be sold or closed. Shares of Dollar General slipped more than 1.5% in premarket hours on the news, down from its record close of $66.17.
- Banks Behaving Badly: Shares of BNP Baribas SA (OTCMKTS ADR: BNPQY) could take a hit today on news that several senior leaders could be facing an insider trading probe. The Financial Times reports that French prosecutors have opened a preliminary investigation. The focus centers on how much certain company leaders knew about the banks litigation risks in the U.S. market when they sold shares. The largest bank in France was under investigation for violating U.S. sanctions for conducting business in Cuba, Iran, and Sudan, and ultimately agreed to settle charges for $9 billion.
- Oil Prices Today: Global oil prices were on this rise this morning as investors continue to speculate on possible production cuts by international crude cartel OPEC during its Nov. 27 meeting in Austria. Brent crude, the global benchmark priced in London, added about $0.60 to rise slightly above $79 per barrel. U.S. December futures for WTI crude, which is traded in New York City, added nearly $0.25, to sit just below $75 per barrel.
- Earnings Reports: Stay tuned for earnings reports from America's Car-Mart Inc. (Nasdaq: CRMT), The J.M. Smucker Co. (NYSE: SJM), Target Corp. (NYSE: TGT), Williams-Sonoma Inc. (NYSE: WSM), Staples Inc. (Nasdaq: SPLS), Lowe's Companies Inc. (NYSE: LOW), and Keurig Green Mountain Inc. (Nasdaq: GMCR).
- Economic Calendar: Today's economic calendar features the Fed Open Market Committee minutes, the EIA Petroleum Status Report, and an update on monthly housing starts.
Full U.S. Economic Calendar November 19, 2014
- MBA Purchase Applications at 7 a.m.
- Housing Starts at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- FOMC Minutes at 2 p.m.
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.