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The Dow Jones shed 60 points on Friday after Standard & Poor's downgraded Greece's long-term sovereign debt rating. The news offset early gains fueled by U.S. jobs and wage growth. January was the 11th consecutive month with job gains above 200,000. Despite Friday's downturn, the DJIA gained 3.84% for the week, its best weekly run since January 2013.
What to Watch Today: With a light economic calendar today, investors will focus on the worrisome game of chicken transpiring in Europe.
With Greece facing a downgrade late on Friday afternoon, the ripples – which our Chief Investment Strategist Keith Fitz-Gerald explained last week – may not be done for the U.S. market just yet. Greece's Prime Minister Alexis Tsipras plans to undo the several austerity measures that were part of his country's international bailout conditions. He'll move forward despite an application deadline pending for Greece to extend its debt obligations and the downgrade 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 Monday:
- Bank Leak: After one of the largest leaks in banking privacy history, HSBC Holdings Plc. (NYSE ADR: HSBC) admitted to helping wealthy customers evade taxes and conceal millions in assets from global governments. In documents obtained from the International Consortium of Investigative Journalists (ICIJ), new evidence has emerged that the world's second-largest bank allowed clients to withdraw "bricks" of cash and evade taxation. The bank also coordinated with the bag men of dictators, a harvester of blood diamonds, corrupt politicians, and wealthy Hollywood stars.
- Merger Mania: Shares of Motorola Solutions Inc. (NYSE: MSI) were up more than 7.7% on news the company may seek a possible sale, according to a Bloomberg report. Potential suitors include private equity firms, and defense contractors such as Raytheon Co. (NYSE: RTN), Honeywell International Inc. (NYSE: HON), and General Dynamics Corp. (NYSE: GD).
- Goodbye to a Legend: Wall Street is mourning the passing of former Goldman Sachs Group (NYSE: GS) Chairman and D-Day veteran John C. Whitehead, who passed away at his home on Saturday at the age of 92. Whitehead was central to Goldman's international expansion and helped design the company's culture that exists to this day. He was also an architect of the 1998 bailout of the collapsed firm Long Term Capital Management. The event foreshadowed the global bank bailouts that hit the markets a decade later and sparked conversations about missed warning signs in the U.S. economy.
- The Fed Speaks: Federal Reserve Chair Janet Yellen will appear before two Congressional committees in late February to discuss monetary policy and the economy. Yellen will testify before the Senate Banking Committee on Feb. 24 and the House Financial Services panel on Feb. 25.
- Twitter Trounces: The markets were hot for Twitter stock on Friday. Shares of Twitter Inc. (NYSE:TWTR) were up more than 16% on Friday after the company announced adjusted fourth-quarter earnings of $0.12 per share on revenue of $479.1 million. Analysts were expecting per-share earnings of $0.06. The report could offer CEO Dick Costolo some breathing room from his Wall Street critics. It was a big day for the company, but we advise caution – the market's not getting this one right. Here's why…
- Oil Prices Today: Last week was highly volatile for energy, despite Brent crude prices having their best two-week stretch since 1988. This morning, prices were back on the rise due to a falling U.S. rig count. Today, March 2015 futures for U.S. crude jumped more than 1.7% hit $52.52 per barrel. Meanwhile, Brent crude jumped to $58.25 per barrel.
Earnings Reports: Today, expect earnings results from Loews Corp. (NYSE: L), Mobileye NV (Nasdaq: MBLY), Hasbro Inc. (NYSE: HAS), Computer Sciences (NYSE: CSC), Dun & Bradstreet Corp. (NYSE: DNB), Diamond Offshore Drilling Inc. (NYSE: DO).
Full U.S. Economic Calendar Feb. 9, 2015
- TD Ameritrade IMX at 12:30 a.m.
- 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.
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.