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Good morning! For April 2, 2015, here are your stock futures, top market news, pre-market movers, and stocks to watch in the stock market today…
Stock Futures Today
The DJIA Index plunged 77 points on Wednesday amid disappointing economic data as the second quarter begins. The S&P healthcare sector SPXHC slipped 0.5% as investors sold stocks and took gains from a strong first quarter.
Wal-Mart Stores Inc. (NYSE: WMT) was Wednesday's biggest decliner on the S&P 500, while the Nasdaq was weighed down by a sell-off in biotech. (Editor's Note: To find out why there's no biotech bubble, just money to be made, go here…)
Top News in the Stock Market Today
- The economic data schedule is light this morning, but investors should keep an eye on statements made by Federal Reserve Chair Janet Yellen during a conference in Washington this morning. In addition, markets will react to fresh jobless claims data, which indicated a pre-recession low. First-time claims for state unemployment benefits totaled 268,000, a better figure from the 285,000 that economists expected.
- Tomorrow, the markets will be closed for Good Friday, but the Bureau of Labor Statistics will release the unemployment report for the month of March. This morning, European stocks were flat despite news that Eurozone monetary policymakers prepared to meet to set rates. Markets in Europe, Hong Kong, and Sydney are all closed on Friday and Monday for the Easter break.
- Oil Prices Today: Failing negotiations between Iran and Western nations are weighing down oil prices this morning. Brent oil, priced in London, slid 2.7% this morning to $55.50 per barrel. WTI crude, priced in New York City, declined more than 2.4% to hit $48.84 per barrel.
Pre-Market Movers in the Stock Market Today: KRFT, MDLZ
- Pre-Market Mover No. 1 – KRFT, MDLZ: The Commodity Futures Trading Commission (CFTC) has sued both Kraft Foods Group (Nasdaq: KRFT) and Mondelez Int'l Inc. (Nasdaq: MDLZ) for allegedly manipulating wheat futures and cash wheat prices. The federal agency alleges that the event happened before the 2012 spin-off that split the two companies. Oddly, the accused pair are sparring over the news. Mondelez said investors will not bear the cost of any settlement, while Kraft representatives told CNBC that the Mondelez will be responsible for payment as the case advances.
- Pre-Market Mover No. 2 – LL: Shares of embattled hardwood company Lumber Liquidators (NYSE: LL) jumped more than 4% this morning on news the company reported better than expected first-quarter sales. The firm said its net sales increased roughly 5.6% to $260 million in the quarter, besting analyst expectations of $258 million.
- Pre-Market Mover No. 3 – FB: Shares of Facebook Inc. (Nasdaq: FB) ticked up more than 0.7% this morning after the stock received an upgrade from Citibank. The investment firm raised its outlook to $97 per share, a swell hike from current levels of $82 per share.
Stocks to Watch Today: MCD, GDDY, KMX, MU, F
- Stocks to Watch No. 1 – MCD: Shares of McDonald's Corp. (NYSE: MCD) slipped 0.5% this morning on news the firm plans to boost pay and benefits for some 90,000 employees. The company has been under pressure from activists to increase its minimum wage to $15 an hour. However, the fast-food giant said it will increase pay by $1 or more above the minimum wage. The firm says it is doing so in order to attract better talent, and raises will take effect on July 1. Note that the raise only applies to workers in company-owned stores – and not in franchises.
- Stocks to Watch No. 2 – GDDY: Shares of GoDaddy Inc. (NYSE: GDDY) were up more than 1% in pre-market hours. The stock soared as high as 34% in its public debut on Wednesday, valuing the web hosting and domain registration company to nearly $5.5 billion, including debt. The company initially priced its shares at $17 to $19, but opened at $20. Here's a breakdown on whether GoDaddy is the right stock for your portfolio.
- Stocks to Watch No. 3 – F: Auto giant Ford Motor (NYSE: F) announced it has partnered with a Chinese firm to create a new joint venture called Changan Ford Automobile. The firms will allocate $1.08 billion to upgrade a car factory in China and produce Changan-Ford cars in the third quarter of 2016. China remains one of the world's hottest auto markets, with car sales growing year-over-year at a pace of 10%.
- Earnings Roundup: Investors can expect earnings reports today from AZZ Inc. (NYSE: AZZ), Carmax Inc. (NYSE: KMX), and Micron Technology Inc. (Nasdaq: MU),
Today's U.S. Economic Calendar (all times EST)
- Challenger Job-Cut Report at 7:30 a.m.
- International Trade at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Gallup US Payroll to Population at 8:30 a.m.
- Federal Reserve Chair Janet Yellen offers the opening remarks at the St. Louis Fed conference in Washington at 8:30 a.m.
- Federal Reserve Gov. Lael Brainard speaks on economic mobility at the St. Louis Fed conference at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Factory Orders at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 3-Year Note Announcement at 11 a.m.
- 10-Year Note Announcement at 11 a.m.
- 30-Year Bond Announcement at 11 a.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
Economic Calendar for April 3
- U.S. Employment Situation at 8:30 a.m.
- Minneapolis Federal Reserve Bank President Narayana Kocherlakota provides the opening remarks the St. Louis Fed community development conference in Washington at 8:30 a.m.
- Louis Federal Reserve Bank President James Bullard speaks at 12:30 p.m.
Money Morning Tip of the Day: One of the best (and lowest-risk) ways to profit from China's burgeoning Internet sector is with this ETF…
Today's tip comes from Money Morning Executive Editor Bill Patalon:
China's Internet sector has a big long-term upside. And so does the KraneShares CSI China Internet Fund (Nasdaq: KWEB), an exchange-traded fund (ETF) that's focused on the sector.
We first recommended the KraneShares Fund last summer as a "backdoor" way to profit from the massive Alibaba Group Holding Ltd. (NYSE: BABA) IPO in September. The KraneShares Fund has devoted 7.75% of its holdings to Alibaba – or nearly 95,000 shares.
BABA shares have fallen about 33% from their peak at $120 last November on the back of worries the company is spending a lot on acquisitions. And with such a large stake in Alibaba, KWEB has been hit by that sell-off.
But that stake in Alibaba also serves as a long-term opportunity. Alibaba's growth numbers are rock-solid. Earnings increased 80% last quarter. Gross merchandise volume (GMV) was up 49%.
The company's mobile base is growing, too. It hit 265 million monthly active users last quarter. That's a yearly increase of 95% and a quarterly increase of 22%.
In sum: Alibaba is a great long-term play. And so is the KraneShares Fund.
Because KWEB is not a "pure play" on Alibaba, it won't rise as much as BABA stock itself when it rebounds (all else being equal).
But it will benefit, nonetheless. And it also poses less risk in the interim. For instance, while BABA shares are down by a third from their highs, KWEB has actually posted a gain.
The KraneShares Fund is the kind of investment folks should look to incrementally add to when they have extra cash or when the price is down – and look to hold for a number of years to maximize profits.
Bill Patalon is a 30-year veteran analyst of business and financial markets. He shares his exclusive stock picks and investing insights every single day in his Private Briefing newsletter. Find out how to subscribe 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.