Oil Prices Now Under $59, Will Weigh on the Stock Market Today

Good morning! U.S. stock futures for Friday, Dec. 12, forecasted a 95-point decline from yesterday's close. On Thursday, the Dow Jones broke its three-day slump with a gain of 63 points.

Stock market today

But a report from the International Energy Agency (IEA) this morning is already weighing on the stock market today...

The agency slashed its 2015 expectations for global demand growth. It predicted slumping oil prices could fuel global instability and may lead to a significant amount of defaults by producers around the world.

The news sent crude oil prices below $59 a barrel - the lowest level since 2009.

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 Friday:

  • Big Buy-In: Chinese e-commerce giant Baidu Inc. (Nasdaq ADR: BIDU) is purchasing a minority stake in technology and ride-sharing giant Uber Technologies. Bloomberg reports that Uber is seeking ways to expand its services in China and that the nation's largest search engine could provide the necessary financial and marketing resources to build a presence quickly. The same report indicates that the investment could be worth up to $600 million. Uber could now be valued up to $40 billion - more on what's driving that whopping sum here...
  • Holiday Sale: Shares of Apple Inc. (Nasdaq: AAPL) were down slightly Friday morning as retail giant Wal-Mart Stores Inc. (NYSE: WMT) announced plans to cut hardware costs of the tech giant's iPhone series. According to reports, Wal-Mart plans to cut the iPhone 6 sales price by $50 to $129 with a two-year contract. The retailer will also slash iPhone 6 Plus prices by $50 to $229, with a similar contract. The smartphone brought in record sales for AAPL at its debut - more than 10 million in the first weekend. But that only hints at the impact of the iPhone 6 on AAPL stock...
  • Shutdown Averted: Congress passed a new spending bill that will ensure the U.S. government is funded through most of 2015. By a vote of 219 to 206, the House of Representatives allocated $1.1 trillion for next year. In a rare sign of unity between House Republicans and U.S. President Barack Obama, the two joined forces to override concerns from House Democrats about the bill's provisions that limit the scale of the Dodd-Frank Act. The bill will now head to the Senate for approval.
  • A Deal Coming: Shares of Staples Inc. (Nasdaq: SPLS) and Office Depot (Nasdaq: ODP) are again in the black this morning. The companies' shares surged 8% and 11%, respectively, on renewed rumors of a possible merger. The rumors came shortly after it was disclosed that activist investor Starboard Value LP holds large stakes in both office-supply retailers. According to the filings, the investor holds a 5.1% stake in Staples and a 10% stake in Office Depot.
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  • Painting Profits: Shares of Sherwin-Williams Co. (NYSE: SHW) slumped more than 1.7% in pre-market hours on news that the company has slashed its 2015 earnings outlook. Despite consensus expectations of $10.88 per share, the company said it expects next year's earing to fall in a range of $10.65 to $10.85.
  • Earnings Reports: Stay tuned for earnings reports from Quanex Building Products Corp. (NYSE: NX) and Champions Oncology Inc. (OTCMKTS: CSBR).

Full U.S. Economic Calendar December 12, 2014 (NYSE: all times EST)

  • PPI-Final Demand at 8:30 a.m.
  • Consumer Sentiment at 9:55 a.m.
Money Morning Tip of the Day: Many Wall Street cheerleaders have embraced lower oil prices as a great thing for the average American. They say money saved at the pump puts extra money in pockets and boosts the economy.But that's the argument of elites completely out of touch with reality. Lower gas prices aren't creating money - they're merely shifting it from one category to another. For example, healthcare spending grew 21% between 2007 and 2013. In the same period, rent climbed 26%, education 22.2%, and groceries 12.5%.

Lower oil prices really reflect a slowing global economy. And they will contribute to further slow growth in 2015. So investors beware these "experts" - don't let their false optimism affect your investing strategy in coming months.

About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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