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Stock market today, Feb. 23, 2015: Good morning! U.S. stock futures were soft Monday morning. However, major European markets jumped in early trading, and Germany's DAX hit a new record high. They are still gaining from Friday's news of a conditional deal that will allow Greece to remain in the Eurozone for at least the next four months. The deal sent U.S. markets up Friday – the Dow saw a 154-point rise, and S&P 500 Index notched a new record high.
Today, investors will continue to keep a close eye on the ongoing drama between Greece and its creditors in the European Union. Greece must present a list of economic reforms by the end of the day for the deal to continue.
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:
- Oscar Party: Shares of Walt Disney Co. (NYSE: DIS) are in focus today on news the company hiked ticket prices at its major theme parks. One-day tickets to the theme park cracked the $100 barrier. Additionally last night, DIS received strong reviews for its subsidiary American Broadcasting Company's (ABC) broadcast of the 87TH Annual Academy Awards. Last night, "Birdman" won the Oscar for Best Picture, along with three other awards.
- Fed Policy Chatter: Investors are speculating over what Federal Reserve Chair Janet Yellen will tell Congress this week. Yellen is set to appear before the Senate and House of Representatives on Tuesday and Wednesday for her semi-annual testimony on monetary policy. Topics are expected to center on a timeline for interest rates, rising U.S. debt levels, and inflation.
- Merger Mania: Shares of cable operator Discovery Communications Inc. (Nasdaq: DISCA) jumped more than 12% on Friday on news the company is being considered as a possible takeover target by 21st Century Fox Inc. (Nasdaq: FOX). Despite the optimism, Fox has denied it is in talks to acquire the firm's wide portfolio of domestic television networks and websites. DISCA stock was up a little over 3% pre-market this morning; FOX shares remained flat.
- Biotech Boom: Shares of Salix Pharmaceuticals Ltd. (Nasdaq: SLXP) slipped about 1% in pre-market hours on news it will be acquired by Canada's Valeant Pharmaceuticals Int'l Inc. (NYSE: VRX). The all-cash deal announced Sunday is expected to be worth up to $14.5 billion, and will pay $158 per share in cash. The deal is expected to save both companies more than $500 million within the first six months. This is Valeant's first big deal since it failed to acquire Botox-maker Allergan Inc. (NYSE: AGN) last year. Learn how tax inversion deals work here…
- Oil Prices Today: Crude oil prices slipped this morning on news Libya has resumed exporting from their embattled ports. Optimism on the pending Greek deal hasn't been able to outweigh concerns about oversupply in the markets. April 2015 WTI prices for U.S. crude, priced at the NYMEX in New York City, slipped 0.4% to hit $50.60 per barrel. Meanwhile, Brent crude, priced in London, was down marginally to hit $60.21 per barrel.
- Earnings Reports: Today, expect earnings results from Seaspan Corp. (NYSE: SSW), Rosetta Stone Inc. (NYSE: RST), Tenet Healthcare Corp. (NYSE: THC), Millennial Media Inc. (NYSE: MM), Dillard's Inc. (NYSE: DDS), DISH Network Corp. (Nasdaq: DISH), Delek US Holdings Inc. (NYSE: DK), Express Scripts (Nasdaq: ESRX), and Atlas Pipeline Partners LP (NYSE: APL).
Full U.S. Economic Calendar February 23, 2015 (NYSE: all times EST)
- Chicago Fed National Activity Index at 8:30 a.m.
- PMI Services Flash at 9:45 a.m.
- Existing Home Sales at 10 a.m.
- Dallas Fed Manufacturing Survey at 10:30 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.
Money Morning Tip of the Day: You can make any investment virtually risk-free under the right circumstances by using a strategy called the "free trade."
Today's tip comes from Money Morning Chief Investment Strategist Keith Fitz-Gerald:
Markets are now at new record highs. Many investors are sitting on solid profits and, in doing so, taking on a lot more risk than they should.
So now is a perfect time to discuss one of my favorite tactics: the free trade.
This strategy lets you do three things at once:
- Capture profits of at least 100%
- Pay for your initial investment
- Reduce the risk on your remaining position to almost nothing
It's simple. Here's how it works:
Once an investment delivers at least 100% returns, sell half your position to capture profits. Then redeploy those profits into other investments, and let the remaining shares of the first investment run.
So you get back your original investment, and you maintain all the upside you can handle, essentially "for free." Even better, since you've now "paid" for your investment, you can stay in the game with not another dollar at risk, even if the stock you've just harvested has a reversal in fortune and goes from hero to zero.
A free trade works in all market conditions, on any investment, and can be set up well in advance. No other technique I know of comes close in terms of simplicity or effectiveness.
Keith Fitz-Gerald is a seasoned market analyst and professional trader with more than 30 years of experience. Forbes.com recently hailed him as a "market visionary." For more investing tips and stock picks from Fitz-Gerald, go here…
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.