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Good morning! Stock market futures for Tuesday, Jan. 13, forecasted a 74-point gain over yesterday's close. In the last session, the Dow Jones plunged 96 points after crude oil prices crashed more than 4%. With Saudi Arabia unwilling to cut production, oversupply concerns continue to cripple the price of oil.
Today, investors will react to the kickoff of earnings season. Watch for reports from KB Home (NYSE: KBH), Kinder Morgan Inc. (NYSE: KMI), and CSX Corp. (NYSE: CSX). Yesterday, Alcoa Inc. (NYSE: AA) announced positive fourth-quarter revenue, surpassing consensus expectations for the aluminum giant. The company said its 14% revenue boost came from strong demand in automotive and aerospace markets. Shares of Alcoa are up more than 1.8% pre-market.
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 Tuesday:
- Bear Market: Shares of Google Inc. (Nasdaq: GOOG) (Nasdaq: GOOGL) were up 0.4% pre-market Tuesday, after closing at a 16-month low Monday. The tech giant's Class A stock slid 1.3%, marking the ninth daily decline over the last ten trading sessions. Shares are down nearly 7% since the beginning of the year, and more than 19% since it hit an all-time high last February. If shares fall by 20%, it would trigger a bear market for the high-volume stock. Here's a simple explanation of the difference between GOOGL and GOOG stock...
- Political Football: The U.S. Senate passed a procedural vote with 63 supporters, including nine Democrats and one independent, to overcome a filibuster in support of the Keystone XL Pipeline. However, the White House announced last week that it will veto any bill in support of the TransCanada Corp. (NYSE: TRP) Keystone XL Pipeline. The pipeline, which would transport more than 800,000 barrels of crude oil each from Western Alberta to the U.S. refinery network, has been held up by the Obama administration for more than six years.
- Stocks to Watch: Shares of Fresh Market Inc. (NYSE: TFM) slipped more than 1% on Monday after the company's CEO abruptly left the company. The specialty grocery store chain announced that Sean Crane, the firm's COO, will assume the role of interim CEO until a search for a new executive is completed. TFM also asserted its per-share earnings for 2014 will fall in a range of $1.56 to $1.64.
- Veto Threat: President Barack Obama has issued a veto threat to any proposed delay in the Volcker rule provision of the Dodd-Frank Act. This week, House Republicans may attempt to pass a delay by a majority vote after the House of Representatives were unable to pass the provision by a required two-thirds majority. According to text of the proposal, the new bill would allow banks to wait until 2019 before they are forced to divest collateralized loan obligations. The Volcker Rule aims to ban the banks from making hazardous and speculative proprietary trades, but big banks are begging for the chance to make the same kind of moves that got us into the 2008 global credit crisis. Money Morning Capital Wave Strategist Shah Gilani explains the situation that should make American taxpayers nervous...
- Oil Prices Today: The S&P 500 energy index fell 2.8% Monday after Goldman Sachs Group Inc. (NYSE: GS) slashed its oil forecast for 2015. The bank cut its WTI-NYMEX 2015 crude forecast to $47.15 a barrel, down from $73.75 a barrel. It also forecast Brent crude prices to settle at $50.40 a barrel, down from $83.75 a barrel. Tuesday morning, February 2015 futures for U.S. crude, priced at the NYMEX in New York City, decreased to $44.72 per barrel. Meanwhile, Brent crude, priced in London, dropped more than 3.4% to hit $45.79 per barrel.
Full U.S. Economic Calendar January 13, 2015 (NYSE: all times EST)
- NFIB Small Business Optimism Index at 7:30 a.m.
- Philadelphia Federal Reserve Bank President Charles Plosser speaks at 8 a.m.
- Redbook at 8:55 a.m.
- JOLTS at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- 10-Year Note Auction at 1 p.m.
- Minneapolis Federal Reserve Bank President Narayana Kocherlakota speaks at 5 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.