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Dow futures for Wednesday, Jan. 7, forecasted a 130-point gain over Tuesday's close. Yesterday, the markets dropped more than 130 points, continuing a broad sell-off fueled by slumping oil prices and growing geopolitical concerns about Europe. On Tuesday, the Euro hit a nine-year low against the dollar.
Today, investors will continue to monitor crude oil prices, which continue to slide to lows not seen since mid-2009. Investors will also keep an eye on the Federal Reserve, which will release the minutes from its December FOMC meeting, the final one of 2014. Language in the minutes could suggest when the central bank plans to hike interest rates in 2015 and its plans to respond to ongoing economic problems in Europe, China, and Japan. Finally, pay attention to the December jobs report from Automatic Data Processing (ADP), the nation's largest jobs processing firm. Consensus expectations for new jobs is 235,000 for the month. The Bureau of Labor Statistics will report the official December jobs report on Friday.
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 Rally: Shares of J.C. Penney Co. (NYSE: JCP) surged more than 20% in post-market hours Tuesday on news that the company's same store sales increase more than expected. J.C. Penney reported that holiday period sales increased by 3.7% over the same period in 2013. Analysts projected same-store sales growth of 2.7% for the period. However, the company is vulnerable moving forward to discounting and increased promotions, like most of its competitors, as it continues to compete against e-commerce channels.
- Kicked to the Curb: Shares of Amazon.com Inc. (Nasdaq: AMZN) slipped more than 2.2% yesterday on news that crowdfunding site Kickstarter will no longer be using Amazon Payments to process contributions. Kickstarter will now be using processor Stripe. The news comes a day after the firm revealed that it sold two billion-plus products worldwide in 2014, a new record-high. With mixed data affecting the company's stock, many investors are asking: "Is it the time to buy Amazon stock?" Yesterday, our technology specialist Michael A. Robinson answered that question on FOX Business' "Varney & Co." Be sure to watch the interview right here.
- Merger Mania: Shares of Facebook Inc. (Nasdaq: FB) were up marginally in pre-market hours after the company announced plans to purchase voice-recognition software company Wit.ai. Back in October, the company announced that 2015 would be a period of significant investment by the social media giant. Facebook wasted no time, although terms of the deal were not announced and the company's intentions for integrating Wit.ai. also remain uncertain. Facebook stock, currently trading near $76.25 per share, holds a consensus one-year target of $87.80, according to Yahoo! Finance.
- No Deal on Tap: Lowell McAdam, the chief executive officer of Verizon Communications Inc. (NYSE: VZ), denied rumors that his company is considering a bid for online media giant AOL Inc. (NYSE: AOL). Shares of AOL were up more than 3% yesterday on news of a possible merger or joint venture between the two companies. AOL has been tied to a possible deal with Yahoo! Inc. (Nasdaq: YHOO) for several months, although rumors are now swirling that Twitter Inc. (Nasdaq: TWTR) could be a possible candidate to purchase Yahoo in the coming months.
- Fast-Food Profits: Shares of Sonic Corp. (Nasdaq: SONC) hit an all-time high of $28.50 after-hours on Tuesday after the company reported stronger-than-expected fiscal first-quarter earnings. The company reported a net income increase of 23% to hit $10.1 million. That translated to a per-share net income result of $0.18, beating consensus earnings of $0.16.
- Oil Prices Today: Oil prices were slipping again this morning as oversupply concerns continue to rattle the markets. This morning, February 2015 futures for U.S. crude, priced at the NYMEX in New York City, decreased to $47.87 per barrel at 7:45 a.m. Meanwhile, Brent crude, priced in London, briefly dropped below $50 per barrel, a level not seen since May 2009.
- Earnings Reports: Stay tuned for an earnings report from Greenbrier Company Inc. (NYSE: GBX), Greif Inc. (NYSE: GEF), Micron Technology Inc. (Nasdaq: MU), Monsanto Co. (NYSE: MON), Resources Connection Inc. (Nasdaq: RECN), UniFirst Corp. (NYSE: UNF), and WD-40 Co. (Nasdaq: WDFC).
- Economic Calendar: Today's economic calendar features the December ADP Employment Report, the FOMC minutes, the EIA Petroleum Status Report, and an update on International Trade.
Full U.S. Economic Calendar
- MBA Purchase Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- International Trade at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- FOMC Minutes at 2 p.m.
- Treasury STRIPS at 3 p.m.
- Chicago Reserve Bank President Charles Evans speaks at 6:30 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.