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U.S. stock futures for Thursday, Jan. 22, forecasted a 70-point increase from yesterday's close. The Dow Jones rose 39 points yesterday ahead of today's critical announcement by the European Central Bank on its stimulus plans. But the Dow's gains were capped by a decline in International Business Machines Corp. (NYSE: IBM) stock, a key index component.
Today, investors jumped on an announcement by Mario Draghi and the European Central Bank (ECB). Just this morning, the ECB launched a massive bond-purchasing program to help kick-start the struggling continent's economy to the tune of 60 billion euros a month, up from the 50 billion euros a month that many had anticipated before the announcement. The bank also kept interest rates unchanged.
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 Thursday:
- Stocks to Watch: Shares of E-commerce company eBay Inc. (Nasdaq: EBAY) were up more than 3% this morning on news that the firm is exploring a sale or spin-off of its enterprise business. The news comes just as the company is planning to spin off its payment services division PayPal. The company also announced that it beat quarterly profit expectations by $0.01, and announced plans to reduce staff ahead of the proposed deals. The firm will cut its workforce by 7%, or 2,400 jobs.
- Fiscal Fuel: Shares of Southwest Airlines Co. (NYSE: LUV) surged more than 3.5% this morning to hit a 52-week high. The rally came after news that the company bested fourth-quarter expectations and set a record annual profit. This is now the company's 42nd consecutive year of profitability. One of the core reasons why Southwest has been so profitable is due to falling oil prices. The company's fourth-quarter unit costs alone were down 3.8%, fueled heavily be falling jet-fuel prices.
- The Next Tech Battle: Shares of Verizon Communications Inc. (NYSE:VZ) were down roughly 0.5% this morning despite the company reporting that its quarterly earnings report matched consensus estimates. The firm reported that its revenue was above expectations as its tablets business outperformed last quarter. The drag on the stock could be the result of news that Google Inc. (Nasdaq: GOOG, GOOGL) has partnered with VZ rivals Sprint Corp. (NYSE: S) and T-Mobile U.S. Inc. (NYSE: TMUS) to begin selling wireless service directly to consumers. The Wall Street Journal reported this morning that Google may begin to implement a small sales program through the two telecom companies in order to boost its Google Fiber broadband Internet service.
- Cutting Costs: Shares of American Express Co. (NYSE: AXP) were down more than 2% in pre-market hours. The company announced plans to slash more than 4,000 jobs in 2015 as part of an efficiency program. The news came just after the firm posted fourth-quarter earnings per share of $1.39 on revenues of $9.1 billion. This was a strong increase from the same period last year, when it reported per-share earnings of $1.21 on revenues of $8.5 billion.
- Oil Prices Today: Crude oil prices were down slightly on the ECB announcement. This morning, February 2015 futures for U.S. crude, priced at the NYMEX in New York City, fell about 0.3% to hit $47.64 per barrel. Meanwhile, Brent crude, priced in London, jumped marginally, up 0.5% to hit $49.29 per barrel. Increased Eurozone bond purchases could push the dollar to new heights, a move that would place pressure on commodity prices.
- Earnings Reports: Stay tuned for an earnings report from Verizon Communications Inc. (NYSE: VZ), Southwest Airlines Co. (NYSE: LUV), Covidien Public Ltd. (NYSE: COV), BB&T Corp. (NYSE: BBT), and Starbucks Corp. (Nasdaq: SBUX).
Full U.S. Economic Calendar January 22, 2015
- Jobless Claims at 8:30 a.m.
- FHFA House Price Index at 9 a.m.
- PMI Manufacturing Index Flash at 9:45 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 2-Year Note Announcement at 11 a.m.
- 2-Year FRN Note Announcement at 11 a.m.
- 5-Year Note Announcement at 11 a.m.
- 7-Year Note Announcement at 11 a.m.
- 10-Yr TIPS Auction at 1 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 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.