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Good morning! Stock market futures for Wednesday, Dec. 10, forecasted a 31-point decline from yesterday's close. The Dow Jones ended Tuesday's trading session down 51 points, fueled by a global equities sell-off. The Greek stock market crashed by more than 13% yesterday on rising geopolitical concerns. The nation moved up its national presidential elections by two months.
Today, investors will be keeping a close eye on global oil prices, which slid again on news that OPEC slashed its demand forecast to a 12-year-low. Concerns over the Greek economy have helped drive Germany's benchmark government bond yield to an all-time low. Meanwhile, keep an eye on Washington D.C., where Congress just avoided a government shutdown and agreed to a $1.1 trillion spending bill to fund the government through September 2015.
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:
- China Woes Continue: Shares of Yum! Brands Inc. (NYSE: YUM) slipped more than 4.4% in premarket hours on news that the company has slashed its 2014 growth forecast. The company said that it anticipates falling profits in China, where the company is still reeling from a food-safety scare that affected its Taco Bell, KFC, and Pizza Hut restaurants. The company has now slashed its July profit forecast by 20%.
- Building Boom: Shares of luxury homebuilder Toll Brothers Inc. (NYSE: TOL) slipped by nearly 1% on news that the company missed fourth-quarter earnings. The company reported per-share earnings of $0.71, down from consensus estimates of $0.73. The company did beat revenue expectations, and said that the average price of homes delivered jumped to $747,000, a jump from $703,000 last year.
- A Deal in Play: Shares of Abercrombie and Fitch Co. (NYSE: ANF) continued to rally this morning on news that its controversial Chief Executive Officer Mike Jeffries has abruptly retired. Jeffries, who has served as CEO since 1992, will also be leaving the company's board of directors. This clears the path for the retailer to receive takeover offers from suitors. The stock hit a 52-week low last week on a weak earnings report. Shares were up more than 8% in yesterday's trading session.
- Oil Prices Today: Oil prices slipped this morning on oversupply concerns and news that OPEC has slashed its demand forecast for 2015. Traders fear there could be more downside in the near future. Volatility continues to be a major concern for energy investors. This morning, January 2015 futures for U.S. crude, priced at the NYMEX in New York City, slipped to $62.61 per barrel. Meanwhile, Brent crude, priced in London, retreated again to $64.81 per barrel. Money Morning Global Energy Strategist Dr. Kent Moors joined Bloomberg TV Monday to explain why OPEC will lose the global oil price war and discussed what the fair market price for oil is right now. Watch the interview here.
- Oil Fallout: Shares of BP Plc. (NYSE ADR: BP) slipped nearly 1% this morning on news that the company plans a large restructuring that will eliminate several hundred jobs. As oil prices continue to slide, the firm will engage in a $1 billion restructuring effort. The company continues to cut costs in an effort to sell more than $43 billion in assets to cover a settlement over the Gulf of Mexico oil spill.
- Earnings Reports: Stay tuned for earnings reports from The Men's Wearhouse Inc. (NYSE: MW), Lands' End Inc. (Nasdaq: LE), Hovnanian Enterprises Inc. (NYSE: HOV), Toll Brothers Inc. (NYSE: TOL), and Restoration Hardware Holdings Inc. (NYSE: RH).
- Economic Calendar: Today's economic calendar features the EIA petroleum status report, an update to the U.S. Treasury budget, and the quarterly services survey.
Full U.S. Economic Calendar December 10, 2014
- MBA Purchase Applications at 7 a.m.
- Quarterly Services Survey at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 10-Yr Note Auction at 1 p.m.
- Treasury Budget 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.