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April 8, 2015, here are your stock futures, top market news, pre-market movers, and stocks to watch in the stock market today…
Stock Futures Today
On Tuesday, The DJIA Index retreated sharply during the last 30 minutes of a busy trading session, erasing an earlier gain of more than 100 points. The sell-off comes the day before earnings season kicks off and the Federal Reserve releases minutes from the most recent FOMC Meeting.
Healthcare stocks were the best performers from the S&P 500, as biotech shares shook off four consecutive days of losses. The Nasdaq Biotech index (INDEXNASDAQ: NBI) and the iShares NASDAQ Biotechnology Index ETF (Nasdaq: IBB) added nearly 1% on the day.
Top News in the Stock Market Today
- Earnings season kicks off with the first-quarter release by international aluminum producer Alcoa Inc. (NYSE: AA). Additional earnings reports will be released by Bed Bath & Beyond Inc. (Nasdaq: BBBY), Northern Technologies International Corp. (Nasdaq: NTIC), OMNOVA Solutions Inc. (NYSE: OMN), Pier 1 Imports Inc. (NYSE: PIR), Rite Aid Corp. (NYSE: RAD), and WD-40 Co. (Nasdaq: WDFC)
- The Federal Open Markets Committee will release the notes from its most-recent meeting. Traders are champing at the bit to read the minutes of March's FOMC Meeting for any clue of when the central bank might raise interest rates. Yesterday, Minneapolis Fed President Narayana Kocherlakota, one of the bank's most notable doves, said the Fed should wait until the second half of 2016 before raising interest rates, then raise them gradually to 2% by the end of 2017.
- On the international front, investors should take note of the Bank of Japan's monetary policy statement. Meanwhile, the European bloc will report February trade data and an update on March retail sales.
- Oil Prices Today: Oil prices retreated again this morning on concerns about oversupply. Yesterday, the American Petroleum Institute's weekly supply levels came in higher than expected. This comes a day after oil prices hit their highest levels since December. Brent oil, priced in London, slid 1.7% this morning to $58.06 per barrel. WTI crude, priced in New York City, declined more than 2.4% to hit $52.84 per barrel.
Pre-Market Movers in the Stock Market Today: RDSA
- Pre-Market Movers No. 1, RDSA: Shares of Royal Dutch Shell (NYSE: RDSA) slipped more than 2% this morning on news the company will buy BG Group Inc. (ADR) (OTC: BRGYY) for $70 billion. This is the largest takeover deal by a major oil company since Chevron Corp. (NYSE: CVX) purchased Texaco in 2000 for $36 billion.
- Pre-Market Movers No. 2, LGF: Shares of filmmaker Lions Gate Entertainment (NYSE: LGF) slipped nearly 7% in premarket hours on news that its largest shareholder is selling a fifth of its stake in the company. Chairman Mark Rachesky's MHR Fund Management said it will sell roughly $337 million in stock.
Stocks to Watch Today: AA, TWTR
- Stocks to Watch No. 1, AA: Shares of Alcoa Inc. (NYSE: AA) were ticking upward, nearly 1% this morning. The firm has struggled in recent quarters due to weak demand from global markets. However, investors are optimistic over the company's planned $5 billion expansion of its aeronautical business.
- Stocks to Watch No. 2, TWTR: Twitter Inc. (NYSE: TWTR) stock jumped another 1.2% this morning, hitting another six-month high. The micro-blogger's shares rose yesterday after Barron's reported that the social media firm has hired advisers at Goldman Sachs Group Inc. (NYSE: GS) to deter any future takeover bid. Unsubstantiated rumors hit the street that Google Inc. (Nasdaq: GOOG,GOOGL) or Facebook Inc. (Nasdaq: FB) could be a potential suitor, although other tech giants have been linked to the firm in the past.
Today's U.S. Economic Calendar
- MBA Mortgage Applications at 7 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 10-Year Note Auction at 1 p.m.
- FOMC Minutes at 2 a.m.
Money Morning Tip of the Day: Turn market volatility to your advantage and earn more money on your investments by using a buying strategy called split entries.
Today's tip comes from Money Morning Tech Expert Michael A. Robinson:
The stock market has been volatile over the last several months. And we'll be dealing with this choppiness for the foreseeable future.
But you can turn these choppy markets into huge profits by using a tool called "split entries."
Here's how it works. Instead of buying your standard amount of a stock, you divide your entries into at least two tranches.
For example, say you want to invest in a company called Ultimate Tech Inc. at $50 a share. Start by investing half of your standard stock purchase at the current market price. In this case, 100 shares would cost you $5,000, but you cut that in half, starting with $2,500.
As soon as that market order fills, you put in what's known as a "lowball limit order." That's an order to purchase shares when they fall to a specified price.
I usually set mine at a 20% discount from my original entry price, but use your best judgment in each individual case.
In this case, you'd buy a second round of Ultimate Tech at $40 a share. When the stock falls to that price, your order automatically fills and you now have an average cost of $45, a 10% discount from your original order.
Now let's say Ultimate rallies all the way to $60. Based on your average price of $45, you have cumulative gains of 25%. Your original order has gains of 16.6%.
But your second half has earned twice as much – 33.3%.
This is a great way to bake extra profits into your portfolio when markets are volatile.
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.