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For April 1, 2015, here are your Dow futures, top market news, pre-market movers, and stocks to watch in the stock market today…
Dow Futures Today
The DJIA Index plunged 200 points Tuesday as energy stocks slipped on news of an extended deadline for an Iranian nuclear deal. Basic materials stocks were the biggest decliners Tuesday. Dow Chemical Co. (NYSE: DOW), Freeport-McMoRan Inc. (NYSE: FCX), and Air Products & Chemicals Inc. (NYSE: APD) all lost more than 1.4% on the day.
Top News in the Stock Market Today
- This morning, we'll get our first indication of the employment situation for March. Automatic Data Processing (ADP) will report private sector job growth for the month. Meanwhile, oil prices will be in focus this afternoon after the Energy Information Administration will provide an update on crude stocks. The United States has seen its oil stocks rise for ten-consecutive weeks, and storage continues to fill up at record levels.
- On the global level, investors must keep an eye on the final March reading of the manufacturing purchasing managers' index (PMI) in China. A similar reading will be released in the primary Eurozone economies.
- The IPO world is abuzz about web hosting company GoDaddy Inc. The company has priced its initial public offering at $20 per share, a nice bump from its original estimates of $17 to $19. The current estimates value the firm at roughly $4.5 billion, including debt. The firm will trade on the New York Stock Exchange under the ticker "GDDY." So, should you take part in this IPO? We break down the questions that investors should be asking ahead of this huge company launch.
- Brent oil, priced in London, remained flat and hovered near $55 per barrel. WTI crude, priced in New York City, slipped a bit ahead of inventory reports. Domestic prices slipped 0.8% to hit $47.22 per barrel.
Pre-Market Movers in the Stock Market Today: SNX, MAC
- Pre-Market Mover No. 1, SNX: Shares of Synnex Corp. (NYSE: SNX) slid more than 3% in post-market hours yesterday after the company reported weaker than expected first-quarter earnings. The firm announced per-share earnings of $1.46, below analyst expectations of $1.52 a share.
- Pre-Market Mover No. 2, MAC: Macerich Co. (NYSE: MAC) said it has rejected the "best and final" offer from Simon Property Group Inc. (NYSE: SPG). Simon announced it has withdrawn its $16.8 billion bid that would have created a massive mall operation company. Shares of MAC slipped nearly 1% on the news
Stocks to Watch Today: BRK.A, RDS-A, CVX, BP, WMT
- Stocks to Watch No. 1, BRK.A: Yesterday, Warren Buffett, chairman and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A), said Greece's departure from the Eurozone "may not be a bad thing for the euro." During an interview with CNBC, Buffett said a "Grexit" could create a better framework for future fiscal policy in the region. Buffett made headlines last week after he worked with private equity giant 3G Capital to drive a merger between Kraft Foods Group Inc. (Nasdaq: KRFT) and H.J. Heinz Co. Here's a breakdown of 10 Warren Buffett stocks to watch in 2015…
- Stocks to Watch No. 2, RDS-A, CVX, BP: With the Iran deal on the ropes, our global energy specialist Dr. Kent Moors sees oil prices about to start creeping. But Dr. Moors warns against the trap of investing in ETFs that track oil prices. The best way to make money over the long-term is to invest in three large multinationals that are trading at a discount and pay strong dividends. Says Kent: "BP Plc. (NYSE: BP), Royal Dutch Shell (NYSE ADR: RDS-A), and Chevron Corp. (NYSE: CVX) are three that regularly pay dividends and could all bridge the gap while their discounted stock prices rebound."
- Stocks to Watch No. 3, WMT: Ahead of earnings season, the nation's biggest retailer is putting pressure on its suppliers to reduce costs. Wal-Mart Stores Inc. (NYSE: WMT) is reportedly encouraging its supplier network to slash product costs. Given concerns over the first quarter's sluggish consumer spending figures and worries about poor winter weather, the retail giant is attempting to rebound amongst worries over its pending earnings report.
- Stocks to Watch, Earnings Roundup: Investors can expect earnings reports today from Monsanto Co. (NYSE: MON), Acuity Brands Inc. (NYSE: AYI), Sigma Designs Inc. (Nasdaq: SIGM), UniFirst Corp. (NYSE: UNF), Marketo Inc. (Nasdaq: MKTO).
Today's U.S. Economic Calendar
- San Francisco Federal Reserve Bank President John Williams speaks on panel on financial stability.
- Atlanta Federal Reserve Bank President Dennis Lockhart will chair a panel on monetary policy.
- Motor Vehicle Sales at 7 a.m.
- MBA Mortgage Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- PMI Manufacturing Index at 9:45 a.m.
- ISM Manufacturing Index at 10 a.m.
- Construction Spending at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m
Money Morning Tip of the Day: Don't listen to pundits warning of a biotech bubble.
Biotech stocks have been soaring. The Nasdaq Biotechnology Index has climbed 46% in the last year, compared to only 10% for the S&P 500.
But after the biotech index shed 7% from March 20 through 26, many Wall Street pundits started crying "bubble."
These tremors could signify a correction in the coming months – but the "bubble" is not about to burst on biotech stocks.
In fact, the Nasdaq Biotech Index hasn't even reached a market correction yet. That's defined as a 10% drop from a market's high. A bear market is reached after a 20% dip.
Now, let's compare that to a "bubble" bursting. When that happens, there's a cataclysmic crash in the market.
Take the 1992 biotech crash for instance. From the end of November 1992 through the beginning of March 1993, the Nasdaq Biotech Index tanked more than 55%.
Money Morning's Biotech Investing Specialist Ernie Tremblay says biotech's recent pullback is normal for the market.
"The correction we're seeing now seems to happen every year at about this time, like clockwork," Tremblay said. "As the sector races upward, everyone begins to wonder how long the momentum can last. After a while, they get queasy from the altitude, and their risk tolerance erodes. Time to take profits. So share prices begin to tumble."
With the recent pullback, now is a great time for investors to add to their positions in strong biotech stocks.
"My investment strategy is always the same in this situation: follow the Bollinger bands," Tremblay said. "When a company you own looks oversold – when its moving average touches the bottom band twice in a short period of time – buy more shares."
Ernie Tremblay understands the FDA approval process and the market demand for emerging drugs better than almost anyone else. Get more biotech investing insight and stock picks from Tremblay 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.