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Dow Jones futures today (Monday) forecasted a 33-point gain over Friday's close. The Dow closed Friday down more than 100 points after December's jobs report revealed a drop in wages, oil prices slumped, and concerns about terrorism in France raised geopolitical concerns across the continent.
Today, investors will react to ongoing geopolitical tensions across Europe, Asia, and even South America. Falling oil prices continue to weigh on the Russia economy. On Friday, Fitch Ratings downgraded Russia's sovereign rating to BBB- from BBB, placing it just one notch above junk status. Meanwhile, the markets will be keeping an eye on Japan. Yesterday, the nation's government proposed a record budget of $800 billion for the 2015 fiscal year. The fourth-quarter earnings season also officially kicks off today as aluminum giant Alcoa Inc. (NYSE: AA) announces results today.
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 Monday:
- Electric Slide: The Wall Street Journal reports that General Motors Co. (NYSE: GM) is planning to enter the electric-vehicle market in the next two years in an attempt to compete against the upcoming Tesla Model 3. The report indicates that GM will design a similar automobile in style and price point. Shares of GM were down 0.6% in pre-market hours. Shares of Tesla Motors Inc. (Nasdaq: TSLA) fell another 1.9% this morning. Shares of the electric vehicle manufacturer have fallen nearly 30% from 52-week highs due to sliding crude oil prices and new competition.
- Orphan Profits: Shares of NPS Pharmaceuticals Inc. (Nasdaq: NPSP) surged more than 8.5% in pre-market hours on news that the company will be purchased by Ireland's Shire Plc. (Nasdaq ADR: SHPG) for $5.2 billion, or $46 per share. The deal will unite two international firms dedicated to the growing business of developing orphan drugs for rare diseases. This is Shire's first major deal after AbbVie Inc. (Nasdaq: ABBV) attempted to purchase the company last year. The deal fell apart in October.
- IPO Approval: Genetic testing continues to move into the investment mainstream. On Friday, Invitae Corp. announced plans to raise up to $86.3 million in an initial public offering (IPO). The company filed paperwork with the Securities and Exchange Commission. Invitae is engaged in personalized genetic testing that helps patients plan and improve future healthcare decisions. The firm reported 2013 revenues of $148 million, and reported $729 million over the first nine months of 2014.
- Stocks to Watch: This morning, shares of Tiffany & Co. (NYSE: TIF) fell more than 7.8%. The company announced a disappointing Holiday season and slashed its guidance for the full fiscal year ending on January 31. The company said it expects earnings of $4.15 to $4.20 per share. That's down from consensus analyst projections of $4.33 per share.
- Brazilian Blues: Shares of Nintendo Co. Ltd. (OTCMKTS ADR: NTDOY) were flat this morning on news that the Japanese video game maker will no longer sell products in Brazil. The company announced over the weekend that it's stopped direct sales to South America's largest economy due to high import taxes and a "complex" business environment.
- Oil Prices Today: Oil prices experienced their seventh-straight weekly loss last week, falling 8.2% over the five previous sessions. This morning, the news didn't get any better. February 2015 futures for U.S. crude, priced at the NYMEX in New York City, fell 3.3% to hit $46.73 per barrel. Meanwhile, Brent crude, priced in London, dropped more than 3.4% to hit $48.39 per barrel. Oil prices were slipping again this morning as oversupply concerns continue to rattle the markets.
- Economic Calendar: Today's economic calendar features a speech by Atlanta Federal Reserve Bank President Dennis Lockhart.
- Earnings Reports: Stay tuned for an earnings report from Alcoa Inc. (NYSE: AA) and Castlight Health Inc. (NYSE: CSLT).
Full U.S. Economic Calendar
- 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.
- Atlanta Federal Reserve Bank President Dennis Lockhart speaks at 12:40 p.m.
- 3-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.