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Good morning! Futures indicate an increase in the stock market today from Friday's close. The Dow and the S&P 500 closed at record highs again on Friday, extending a five-week rally for the two indices. Both have now posted double-digit gains for 2014.
On Friday, China announced plans to slash interest rates on the same day European Central Bank Head Mario Draghi called for measures to fuel inflation as soon as possible. Confidence swelled again on news that Germany's Ifo Business Climate Index turned positive in November. This is the first positive report for the German Index after six-straight monthly declines.
What to watch today: expect significant attention to how Wall Street handles conflicting reports on confidence in the global economy. Although optimism turned positive in Germany, a new survey by Markit shows that global business confidence has slipped to a five-year low. According to the report, company investment and hiring intentions have hit their weakest level since the end of the global financial crisis. The survey could be seen as a harbinger of slowing growth or could simply be a small blip in the economic recovery effort.
Here's what else you should know about the stock market today, including your "Money Morning Tip of the Day."
- The Price of Oil: In a speech this morning, Russian Finance Minister Anton Siluanov said his energy-producing nation is losing $140 billion per year due to economic sanctions and falling energy prices. The minister said that economic sanctions tied to the ongoing geopolitical crisis in Ukraine will cost Russia about $40 billion in 2014. Meanwhile, the 30% decline in oil prices will cost the country $90 billion to $100 billion. Money Morning's Global Energy Strategist Dr. Kent Moors said in October that falling crude prices were a massive threat to the Russian economy. Moors also said the battle between oil cartel OPEC and Russia has just begun, and the consequences could be huge for investors.
- Another Day of Deals: Shares of Dutch pharmaceutical firm Prosena Holding NV (Nasdaq: RNA) jumped nearly 70% in premarket hours on news that it will be acquired for $680 million. According to reports, BioMarin Pharmaceuticals Inc. (Nasdaq: BMRN) has offered $17.75 per share. The deal could be worth significantly more however, if certain Prosensa drugs receive regulatory approval. Meanwhile, RenaissanceRe Holdings Ltd. (NYSE: RNR) has agreed to purchase Platinum Underwriters Holdings Ltd (NYSE: PTP) for $1.9 billion.
- Merger Mania: The battle for original television content and audience share is accelerating. Shares of pay-television channel Starz (Nasdaq: STRZA) rose more than 4% this morning on news that it could on the block. According to the New York Post, the company could be sold for nearly $5 billion. The report indicates the leading buying candidates include Showtime-owner CBS Corp. (NYSE: CBS) and film-studio Lions Gate Entertainment Corp. (USA) (NYSE: LGF). In other news, Lionsgate shares slipped more than 3% this morning on news that its latest installment of the Hunger Games film franchise "Mockingjay: Part 1" earned 22% less on revenues during its opening weekend than its previous film, "Catching Fire."
- Start Your Engines: Tesla Motors Inc. (Nasdaq: TSLA) stock increased 1.2% this morning on news the electric car company may forge a partnership with BMW (OTC: BAMXY) over batteries and light-weight components. The news comes from an interview with German newspaper Der Spiegel with Tesla CEO Elon Musk.
- Oil Prices Today: Oil prices ticked south on Monday morning, ahead of a deadline for nuclear talks between the United States and Iran. December futures for U.S. crude dipped this morning by 0.3% to $76.26. Meanwhile, Brent crude, priced in London, remained above $80 but slipped by 0.4%. Prices have been on the rise ahead of an important OPEC meeting on Thursday, when the global oil cartel may slash production by up to 600,000 barrels.
- Economic Calendar: Today's economic calendar features the Chicago Fed National Activity Index, the PMI Services Flash, and the Dallas Fed Manufacturing Survey.
- Earnings Reports: Stay tuned for earnings reports from Navios Maritime Holdings Inc. (NYSE: NM), Trina Solar Ltd. (NYSE: TSL), and Sears Holdings Corp. (Nasdaq: SHLD)
Full U.S. Economic Calendar Nov. 21, 2014
- Chicago Fed National Activity Index at 8:30 a.m.
- PMI Services Flash at 9:45 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.
- 2-Year Note Auction at 1 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.