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Good morning! U.S. stock futures for Thursday, Nov. 20, forecasted a 70-point decline from yesterday's close (Wednesday) ahead of the release of minutes from the October meeting of the Fed Open Market Committee (FOMC) and an important report on U.S. housing construction. The Dow dipped two points on Wednesday.
Today, expect the markets to react to news from abroad. Weak economic numbers in Europe, Japan, and China continue to weigh down global stocks and renew doubts about continued global growth. This morning, the China flash HSBC/Markit manufacturing purchasing managers' index slipped for the first time in six months. Meanwhile, PMI data in France and Germany increased investor concerns about the health and stability of the Eurozone. The German PMI level hit a 16-month low of 50, while France slipped to 47.5. A breakeven level is considered 50. Meanwhile the broader Eurozone PMI level slipped to 51.2, a 16-month low.
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 Thursday:
- Earnings Blowout: Shares of Best Buy Co. Inc. (NYSE: BBY) were up more than 9% this morning on news that the company beat earnings estimates by a wide margin. The per-share adjusted earnings reached $0.32, compared to consensus estimates of $0.25 per share. The company also reported a 2% increase in same-store sales, besting an expected 2.2% decline. The company now faces its most challenging quarter as the Holiday season approaches and winter weather awaits.
- Another Offering: Shares of GoPro Inc. (Nasdaq: GPRO) slipped 6% during trading hours yesterday and another 6.2% in post-market hours on news that the company provided an offering of 10.4 million shares at $75 per share. That's a steep decline from an intraday high of $86 per share yesterday.
- Gone Google: Internet browser Mozilla has dumped Google Inc. (Nasdaq: GOOGL) as its default search engine, and replaced it with Yahoo! Inc. (Nasdaq: YHOO). Mozilla signed a five-year agreement with Yahoo that begins in December. This ends Mozilla's relationship with the world's largest tech company.
- Taking Off: Shares of JetBlue Airways Corp. (Nasdaq: JBLU) jumped more than 4% yesterday after the company announced plans to charge baggage fees for certain customers. The airline company will create three separate classes of tickets in the first six months of 2015. However, the company – which remained one of the last airline firms not to charge for checked bags – said that only the top two tiers of customers will receive their first checked bag for free in the future. The company expects an annual $200 million in operating income due to the policy change.
- Banks Behaving Badly: Banking giant Goldman Sachs Group Inc. (NYSE: GS) has fired two employees on news that one of its junior analysts had allegedly accessed and passed along confidential information from its regulator, the New York Federal Reserve. The junior employee had previously worked at the regulator before joining the investment firm. Following the departure of the junior employee in September, the company also terminated his supervisor, who was once a government official and a former advisor at the Federal Deposit Insurance Corporation.
- Another Lawsuit: Shares of General Motors Co. (NYSE: GM) were down nearly 1% this morning on news that the State of Arizona has filed a lawsuit against the automaker potentially worth $3 billion. The state alleges that the auto company hid safety data from regulators in order to reduce any costs related to a recall. According to a report from The New York Times, the suit states that hundreds of thousands of drivers have operated unsafe vehicles, and the state is seeking $10,000 per violation.
- 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 $0.47 to hit about $78.57 per barrel. U.S. December futures for WTI crude, which is traded in New York City, added nearly $0.11, to sit at $74.69 per barrel. According to recent reports, OPEC could slash output from 250,000 to 600,000 barrels in order to buoy prices.
- Earnings Reports: Stay tuned for earnings reports from Dollar Tree Inc. (Nasdaq: DLTR), Ross Stores Inc. (Nasdaq: ROST), Best Buy Co. Inc. (NYSE: BBY), The Gap Inc. (NYSE: GPS), and GameStop Corp. (NYSE: GME).
- Economic Calendar: Today's economic calendar features Consumer Price Index, an update on weekly jobs claims, the EIA Natural Gas Report, a report on existing home sales, the PMI Manufacturing Index, and the Fed Balance Sheet.
Full U.S. Economic Calendar
- Consumer Price Index at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- PMI Manufacturing Index Flash at 9:45 a.m.
- Philadelphia Fed Survey at 10 a.m.
- Existing Home Sales at 10 a.m.
- Leading Indicators at 10 a.m.
- New York Federal Reserve Bank President William Dudley speaks at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 2-Yr FRN Announcement at 11 a.m.
- 2-Yr Note Announcement at 11 a.m.
- 5-Yr Note Announcement at 11 a.m.
- 7-Yr Note Announcement at 11 a.m.
- 10-Yr TIPS Auction at 1 p.m.
- Cleveland Federal Reserve Bank President Loretta Mester speaks at 1:30 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
- San Francisco Federal Reserve Bank President John Williams speaks at 8:30 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.