Good morning! Stock market futures for Friday, Feb. 13, forecasted a 34-point increase from yesterday's close. The Dow Jones gained more than 110 points Thursday on strong earnings reports, good economic data, and renewed hopes for a deal between the European Union and Greece. Investors are optimistic about energy prices. Brent crude jumped above $60 for the first time this year.
Friday has already brought surprising news that the German economy expanded by 0.7% in the fourth quarter. The number shattered consensus expectations of a 0.3% increase, and helped restore some hope of the economic bloc's largest economy and the broader euro zone.
Meanwhile, a ceasefire agreement between Russia and Ukraine could help fuel a rally. Hopes are also rising for a conclusion to the Greek debt negotiations. Greek officials are planning to reach a new deal when they meet with euro zone finance ministers Monday.
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 Friday:
- Gamers Report: Shares of Zynga Inc. (Nasdaq: ZNGA) plunged nearly 13% in pre-market hours after the "Farmville" game-maker reported a surprise first-quarter decline and lower-than-expected sales. Meanwhile, shares of competitor King Digital Entertainment Plc. (NYSE: KING) surged more than 23% after the company beat earnings estimates. Its newer games like "Candy Crush Soda Saga" helped boost profits and make up for the declining popularity of older games.
- Earnings Week: Kraft Foods Group Inc. (NYSE: KRFT) announced a serious shakeup in its upper management. CFO Teri List-Stoll, CMO Deanie Elsner, and Chuck Davis, executive vice president of research, development, quality and innovation, are all leaving the organization. Shares slumped more than 2% pre-market Friday. Meanwhile, ConAgra Foods Inc. (NYSE: CAG) forecasted a weak full-year profit due to weakening sales and a strengthening dollar. CAG stock was flat in pre-market hours.
- Broadcaster Boom: Shares of CBS Corp. (NYSE: CBS) were up 3.77% Friday morning on news the company beat quarterly estimates. The broadcasting firm reported per-share earnings of $0.79 on revenue of $3.68 billion. This surpassed Wall Street estimates of $0.77 per share on revenue of $3.65 billion. CBS also reported stronger advertising sales, citing successes with Thursday night football broadcasts and coverage of the midterm elections.
- Merger Mania: Shares of Salix Pharmaceuticals Ltd. (Nasdaq: SLXP) were up another 1.89% this morning on news the company could be sold to Shire Plc. (NYSE: SHPG). Yesterday, SLXP jumped more than 4% after rumors the company is working with PE firm Centerview to explore possible sale options.
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- Oil Prices Today: Yesterday, one of the top U.S. shale oil producers, Apache Corp. (NYSE: APA) said it plans to slash its capital spending and rig count this year in the face of falling oil prices. Today, March 2015 futures for U.S. crude, priced at the NYMEX in New York City, jumped 2.3% to hit $52.38 per barrel. Meanwhile, Brent crude, priced in London, surged another 4% yesterday to top $60 per barrel for the first time this year.
- Earnings Reports: Today, expect earnings results from ITT Corp. (NYSE: ITT), Exelon Corp. (NYSE: EXC), JM Smucker Co. (NYSE: SJM), Shanda Games Ltd. (Nasdaq: GAME), Ventas Inc. (NYSE: VTR), TransCanada Corp. (USA) (NYSE: TRP), and Red Robin Gourmet Burgers Inc. (Nasdaq: RRGB).
Full U.S. Economic Calendar February 13, 2015 (NYSE: all times EST)
- Import and Export Prices at 8:30 a.m.
- Consumer Sentiment at 10 a.m.
Money Morning Tip of the Day: Shorting takes guts and more than a little discipline, but don't be put off...
Today's tip comes from Money Morning Chief Investment Strategist Keith Fitz-Gerald:
Most investors focus exclusively on buying stocks in an attempt to capture huge returns. That's too bad, because it means they restrict themselves to half the opportunities available to them.
After all, markets move up AND down, which means there is plenty of profit potential to be had in both directions.
George Soros made $1 billion in a single trade that famously almost broke the Bank of England in 1992. John Paulson made billions from the housing crisis by betting against the grain. Doug Kass of Seabreeze Partners is famous for bucking conventional wisdom on seemingly mighty companies and laughing all the way to the bank.
That's why shorting is one of the first tactics I shared in my Total Wealth publication.
Now shorting stocks isn't for everybody - it takes guts, conviction, and a whole lot of discipline to do it profitably. But done right, it can really boost your profits.
To learn more about the profit opportunities in short selling, plus five stocks to get you started, check out my recent column: How to Profit from the Five Scariest Stocks on Wall Street Right Now.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.