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Good Morning! Stock futures for Friday, March 20, forecasted a 141-point gain for the DJIA today from yesterday's close. The Dow Jones Industrial Average shed 117 points on Thursday thanks to a slump in oil and commodity prices and a stronger dollar that weighed down energy and material stocks.
What to Watch Today: Keep an ear to two speeches from members of the Federal Reserve, Charles Evans and Dennis Lockhart. They will be scrutinized for any insight on when the central bank could increase interest rates.
Investors with a focus abroad will keep an eye on the German producer price index for February and a report on consumer prices in Canada. In addition, markets are reacting to a release of policy notes by the Bank of Japan and a speech by the Reserve Bank of Australia on the future of the Asia-Pacific markets.
Here's what else you should know about the DJIA today – including your "Money Morning Tip of the Day" – to make it a profitable Friday:
- To the Skies: Shares of Amazon.com Inc. (Nasdaq: AMZN) were up this morning on news that the FAA has granted the company approval to test delivery drones in Washington state. The federal agency's approval is a big step forward for Amazon, as it aims to bring its "Prime Air" delivery service forward in major metropolitan areas. The deal will allow the firm to test the service and possibly bring it to the wider population in the coming years.
- Electric Groove: Shares of Tesla Motors Co. (Nasdaq: TSLA) were up this morning roughly 1% after the firm announced new software upgrades aimed to reduce "range anxiety." The electric car manufacturer revealed the in-car application that notifies Model S owners when their vehicles begin to run low on power. The firm also said it will have self-driving cars in the U.S. by summer. So, is this announcement a game-changer for Tesla and its CEO Elon Musk? Here's how the moonshot entrepreneur did with the presentation yesterday.
- Going Public: Internet hosting company GoDaddy Inc. (NYSE: GDDY) announced a range of $17 to $19 for its initial public offering. The company will list itself on the New York Stock Exchange under the symbol GDDY this morning. The IPO is a long time coming for the online company. It had originally filed to go public in 2006, but withdrew its plan at the time. Here's how we're playing GDDY stock after the IPO…
- Biotech Boom: Shares of drug maker Biogen Idec Inc. (Nasdaq: BIIB) jumped nearly 7% this morning on news the company has released a positive report on its latest drug aimed at treating early-stage Alzheimer's disease. Although the preliminary study is early in its results, the promising drug has shown evidence of reducing cognitive decline. The biotech stock is up roughly 42% since December.
- Earnings Beat: Shares of Nike Inc. (NYSE: NKE) jumped nearly 4.5% in pre-market hours on news the company reported a quarterly net income jump of 16%. The sports apparel retailer reported fiscal third-quarter earnings of $0.89 per share on revenue of $7.46 billion. This report beat Wall Street per-share projections of $0.84 on $7.62 billion in sales. Despite beating earnings, the company's sales figures came in lower than expected due to downward effects of the surging U.S. dollar.
- Oil Prices Today: WTI crude slipped another 0.8% this morning. Prices are headed for their fifth-consecutive weekly loss. Brent crude fell another 1.1% to $53.82 per barrel. The declines came on news that Kuwaiti oil ministers said OPEC would be forced to continue production despite crashing prices around the globe. Meanwhile, prices are still falling on the slight possibility that the U.S. and Iran are able to work out a deal over the latter's nuclear program.
- Earnings Reports: Investors can expect earnings reports today from Tiffany & Co. (NYSE: TIF), Darden Restaurants Inc. (NYSE: DRI), KB Home (NYSE: KBH), and Cheetah Mobile Inc. (Nasdaq: CMCM).
Full U.S. Economic Calendar March 20, 2015
- Atlanta Fed Business Inflation Expectations at 10 a.m.
- Atlanta Federal Reserve Bank President Dennis Lockhart speaks at 10:20 a.m.
- Chicago Federal Reserve Bank President Charles Evans speaks at 11:30 a.m.
Money Morning Tip of the Day: General Electric Co. (NYSE: GE) stock is a "Buy." It's a solid dividend payer that will see increased investor demand on several factors.
Today's tip comes from Money Morning Executive Editor Bill Patalon:
When a Wall Street investment bank, hedge-fund manager, or sell-side analyst starts backing a stock, it can attract the kind of liquidity that drives up its value in a big way.
And that's just what's happening with General Electric Co. (NYSE: GE), the makeover-in-progress conglomerate we first recommended in January 2014.
GE's shares have slipped about 4.75% since we recommended it (although we're at breakeven if you include dividends). So we may have been a bit early on our call.But we weren't wrong.
We believe several factors – the surge in the U.S. dollar, the slowing global economy, and the odds that the Federal Reserve will soon raise interest rates – will bolster investor demand for stocks like GE. It's a solid dividend payer, a turnaround in the making, and a stealth player in some new markets.
Suddenly, we're not alone in our views on GE stock.
Tom Huber, who has run the T. Rowe Price Dividend Growth Fund (MUTF: PRDGX) since 2000, named GE as his "best stock pick" in a recent Barron's interview.
"After not owning General Electric for many years, we've come back to the stock in the past six months," he told the investment weekly. "It makes sense right now to own some large-cap, high-yielding names with durable businesses."
The current consensus on GE is $29 a share – with a high-water estimate of $33.
The bottom line: We've been saying for more than a year that GE is a stock you want to own. Now a heavy-hitter mutual-fund manager is telling folks the same thing.
To read more about why GE is a "Buy" right now, check out Patalon's recent Private Briefing column: A Big-Time Fund Manager Shares His "Best Pick"
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.