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U.S. stock futures for Wednesday, Feb. 18 were down 20 points from yesterday's close as investors seek clarity on the Greek debt situation. The Dow Jones gained 28 points on Tuesday after reversing losses from earlier in the session, while the S&P 500 hit a new closing record high. Investors were highly optimistic about a possible Greece-EU deal after the beleaguered country said it would seek an extension for its debt obligations.
This morning, investors will be looking ahead to this afternoon, when the Federal Reserve will release minutes from its January meeting. The focus will center on whether the FOMC has changed any language of its policy statements to hint a sooner-than-expected interest rate increase.
Overseas, investors will be looking for clarity on the Greek-EU situation, but there are reasons to also keep an eye on Ukraine, where hopes of a ceasefire are fleeting. In eastern Ukraine, pro-Russian rebels invaded a local government stronghold and engaged in street-to-street combat. The news is dashing hopes that the Western-brokered deal would reduce tensions in the region. The S&P 500 will attempt to hit new heights, a day after it closed above 2,100 for the first time ever,
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 Wednesday:
- Sell-Off: It looks like the Big Money is getting out of Apple stock. George Soros, founder of Soros Fund Management, exited positions of Intel Corp. (Nasdaq: INTC) and Apple Inc. (Nasdaq: AAPL) in the final quarter of 2014, according to a regulatory filing. Other hedge fund managers, including David Einhorn at Greenlight Capital and Philippe Laffont at Coatue Management also slashed their Apple stock holdings in the fourth quarter. The news comes as investors took profits ahead of the company's record-setting iPhone holiday sales.
- Money Problems: The Swiss prosecutor's office has searched the Zurich headquarters of banking giant HSBC Holdings Plc. (NYSE ADR: HSBC) following the launch of a criminal probe into the firm's alleged money laundering operations. "A search is currently underway in the premises of the bank, led by Attorney General Olivier Jornot and the prosecutor Yves Bertossa," Geneva's prosecutor said Wednesday in a statement. Meanwhile, government authorities are investigating heavy-manufacturer Caterpillar Inc. (NYSE: CAT) over suspicious cash movements among its overseas subsidiaries.
- Hot Gas: Shares of Chesapeake Energy Corp. (NYSE: CHK) were flat this morning on news that it has sued its ousted founder, Aubrey McClendon. The company claims that McClendon stole sensitive data about the company's oil and gas prospected before he departed the firm in 2013. The firm alleges that the former CEO had his assistant print out maps and data, and that McClendon emailed this sensitive material to his personal email.
- Biotech Bust: Tuesday saw two upstart biotech firms implode. Shares of Celsus Therapeutics Plc. (Nasdaq: CLTX) crashed 81.4% in a day after the firm's leading drug from its portfolio failed a mid-stage trial. Meanwhile, VBL Therapeutics Inc. (Nasdaq: VBLT) slumped 65% after the firm ceased development of its experimental inflammatory drug used to combat psoriasis and ulcerative colitis. Investors looking for the best biotech stocks for 2015 should read Michael A. Robinson's recent breakdown of five tech stocks with a bright future. Inside, he outlines a small-cap leader in what are known as "biologic" ingredients for pharmaceuticals. The stock was up 81% in 2014, and it has plenty more room to run this year.
- Oil Prices Today: Crude oil prices slumped this morning on news that analysts were not confident that crude could sustain its recent rally. March 2015 futures for U.S. crude, priced at the NYMEX in New York City, dipped 1.8% to hit $52.51 per barrel. Meanwhile, Brent crude, priced in London, slipped another 1.9% to hit $61.29 per barrel.
- Earnings Reports: Today, expect earnings results from Williams Companies Inc. (NYSE: WMB), Williams Partners LP (NYSE: WPZ), Virgin America Inc. (NYSE: VA), Trinity Industries Inc. (NYSE: TRN), SolarCity Corp. (Nasdaq: SCTY), Garmin Ltd. (Nasdaq: GRMN), and EOG Resources Inc. (Nasdaq: EOG).
Full U.S. Economic Calendar February 18, 2015
- MBA Purchase Applications at 7 a.m.
- Housing Starts at 8:30 a.m.
- PPI-Final Demand at 8:30 a.m.
- Redbook at 8:55 a.m.
- Industrial Production at 9:15 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- FOMC Minutes at 2 p.m.
Money Morning Tip of the Day: Don't "chase" the initial share-price gains of hot initial public offerings (IPOs) - if you buy on the first trading day, you could get burned. Instead, you can side-step Wall Street and play the IPO boom this way...
Today's tip comes from Money Morning Tech Expert Michael A. Robinson:
Successful IPOs can be a great source of wealth.
Take biotech firm Spark Therapeutics Inc. (Nasdaq: ONCE). The stock began trading Jan. 30 and is up roughly 100% from its offering price of $23.
But here's a little secret Wall Street doesn't like to talk about: Most retail investors can't get anywhere near hot IPOs like Spark's.
That's because most initial shares are reserved for mutual funds, hedge funds, insurance companies, and high-net-worth individuals. Retail investors like you have to pay a premium for the stock after it's already begun trading, seriously cutting into your profits.
But this doesn't mean you're shut out of IPO market profits...
Not if you buy shares in the First Trust IPOX-100 Index Fund (NYSE Arca: FPX). FPX tracks the market for IPOs and has long been one of my favorite exchange-traded funds.
FPX holds 100 stocks and offers access to the tech, finance, auto, retail, and energy sectors, to name a few.
I think every investor should consider holding FPX for the long haul. By doing so, you can grab the upside and excitement that IPOs offer without all the volatility inherent in new issues.
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.