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Good morning! U.S. stock futures for Thursday, March 19, forecasted a 43-point decrease from yesterday's close. The DJIA surged 227 points Wednesday after the Federal Reserve indicated a slower pace for an expected interest rate hike this year. Commodities rallied on the news, with gold prices jumping nearly 2% and silver prices up almost 2.5%.
Apple stock (Nasdaq: AAPL) makes its official debut on the Dow Jones Industrial Average today. It replaces AT&T Inc. (NYSE: T). [Here's why Apple – the most valuable company in the world with a market cap of $732.5 billion – just became worthy of joining the DJIA…]
This morning, markets will continue to react to yesterday's Federal Reserve announcement to delay an interest hike until the nation sees sustained improvements in its employment situation and increased inflation. That test will start today with the announcement of weekly jobless claims.
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:
- Activist Woes: Shares of Yahoo Inc. (Nasdaq: YHOO) were flat on the news the tech giant plans to shutter its remaining operations in China. The company said it will lay-off between 200 and 300 employees and close down its research center in Beijing. [Editor's Note: A number of indicators – weak factory production, slowing car sales, and more – have international investors questioning whether the so-called "Chinese Economic Miracle" is losing steam. The result has been a number of strong Chinese stocks are oversold right now – but they won't stay that way. Instead of betting against the Chinese stock market, pick up these three stocks that will shake off the bears…]
- Return Policy: Big-box retailer Target Corp. (NYSE: TGT) will raise the minimum wage for all its employees to $9 per hour. The policy change matches the decision by rivals like Wal-Mart Stores Inc. (NYSE: WMT) and TJX Cos. (NYSE: TJX) to increase pay. Target also announced yesterday it plans to allow returns for up to a year on the store's private and exclusive brands. The decision is an extension of its previous 90-day return policy and is the first of its kind for a large-scale retailer. Get Money Morning Resource Specialist Peter Krauth's forecast for TGT stock in 2015 here…
- International Markets: Investors with an eye on international markets should monitor today's earnings report from China Steel Corp. (OTCMKTS: CISXF), as the company's success is a barometer of China's broader industrial sector and domestic consumption of commodities. In addition, investors should look at the European Central Bank's monthly release of its Economic Bulletin, which provides insight on the continental bloc's monetary policy.
- Oil Prices Today: Oil prices retreated this morning, despite an uptick Wednesday afternoon. WTI crude oil prices, marked in New York City, slipped roughly 4% to fall below $44 per barrel. Brent crude oil, priced in London, fall 2.1% to $54.69 per barrel. Oversupply concerns outweigh the Fed's statement and a falling dollar. Yesterday, the EIA reported U.S. crude inventories surged another 9.6 million barrels to a new record of 458.5 million barrels for the week of March 13.
- Earnings Reports: Investors can expect earnings reports today from Care.com Inc. (Nasdaq: CRCM), Mattress Firm Holding Corp. (Nadsaq: MFRM), Nike Inc. (NYSE: NKE), Star Bulk Carriers Corp. (Nasdaq: SBLK), and Sabine Oil & Gas Corp (Nasdaq: SOGC).
Full U.S. Economic Calendar March 19, 2015 (NYSE: all times EST)
- Jobless Claims at 8:30 a.m.
- Current Account at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Philadelphia Fed Business Outlook Survey at 10 a.m.
- Federal Reserve Gov. Daniel Tarullo speaks at 10 a.m.
- Leading Indicators at 10 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-Year TIPS Auction at 1 p.m.
- Treasury Budget at 2 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
Today's tip comes from Money Morning Chief Investment Strategist Keith Fitz-Gerald:
Risk management may not be the most exciting part of investing. But it is the most important.
And a tool called "position sizing" stands out above all others as the most powerful, and not just for cutting risk either, but for boosting your profits, too.
The concept is simple. Controlling the amount of money you place in each trade can lead to bigger profits and mitigate the risk of a catastrophic loss.
Position sizing is the science of cutting risk in your portfolio down to the bone. It answers the question "How big should I make my position for any one trade?"
Many investors think they have this covered with trailing stops that take them out of an investment when some predetermined limit is hit.
Position sizing is different. It's about determining how much of something you can buy for maximum profits, or even if you can afford to buy in the first place.
Understanding position sizing will put you miles ahead of other investors who spend all their time wondering what to buy while ignoring the critical question of how much to buy.
To learn three different methods for sizing your positions, with step-by-step instructions for each, go here: This One Risk Management Tool Made the Difference Between Bankruptcy and $13 Million
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.