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Stock Futures Today
Futures for the Dow Jones Industrial Average for Monday, July 6, forecasted a 125-point decline from Thursday's close as traders brace for the consequences of Greek voters' decision to reject European austerity measures that would allow them to access much-needed financial assistance. Meanwhile, Greece Finance Minister Yanis Varoufakis resigned from his position, stating that his absence in the future could potentially enable Prime Minister Alexis Tsipras to reach a deal with creditors.
The markets were closed on Friday in observance of Independence Day. On Thursday, the DJIA fell 27 points as investors kept a close eye the Greek debt talks.
Top News in the Stock Market Today
- The Stock Market Today: Yesterday, voters in Greece voted a resounding "no" and rejected European creditors' austerity provisions. Initial reports indicate that roughly 61% of Greeks voted against the terms, reinforcing its governmental vote last year to launch an anti-austerity party into power. The most important thing to watch today is the performance of Portuguese, Spanish, and Italian government bonds. The three nations also face significant debt burdens.
- China Crash: Chinese investors are doing all they can to prevent an outright collapse of the nation's stock market. Markets are already down more than 20% since mid-June, and the free fall has shown little sign of stopping. Over the weekend, the nation's 21 largest brokerage firms announced plans to purchase roughly 120 billion yuan (about $19.3 billion) in stocks in a desperate effort to stabilize the market. The country has also halted all new initial public offerings until further notice on its two stock exchanges.
- Oil Outlook: Oil prices are plunging this morning thanks to the Greek vote and ongoing market turmoil in China. WTI crude futures for August slumped 4.7% this morning to hit $54.25 per barrel. Meanwhile, Brent oil prices fell 2.8% to hit $58.62 per barrel. The declines are punishing oil producers in pre-market hours. Shares of Chevron Corp. (NYSE: CVX) are down 1.1%, while Exxon Mobil Corp. (NYSE: XOM) is down another 1.2%. Meanwhile, Chesapeake Energy Corp. (NYSE: CHK) remains in a free fall, declining another 2.7% this morning.
- Earnings Reports: Companies reporting earnings this morning include Computer Services Inc. (Nasdaq: CSVI), Healthcare Services Group Inc. (Nasdaq: HCSG), Stoneridge Inc. (NYSE: SRI), and Walter Energy Inc. (NYSE: WLT).
Pre-Market Movers in the Stock Market Today: AET, PM, HUM, AMZN
- Pre-Market Movers No. 1, AET: On Friday, health insurer Aetna Inc. (NYSE: AET) announced plans to purchase rival Humana Inc. (NYSE: HUM) for roughly $37 billion. This represents the largest deal in the history of the insurance industry. The deal allows Aetna to challenge rival Anthem Inc. (NYSE: ANTM) to become the second-largest insurance company by membership. Aetna shares are down more than 6.7% this morning, while Humana shares are up nearly 2%.
- Pre-Market Movers No. 2, PM: Global cigarette manufacturer Philip Morris International Inc. (NYSE: PM) will divest roughly $1 billion of its stake in PT HM Sampoerna Tbk, the largest cigarette maker in Indonesia. Philip Morris will cut its 98.18% stake in the firm in order to comply with free-float rules. PM shares were flat this morning.
- Pre-Market Movers No. 3, AMZN: Shares of Amazon.com Inc. (Nasdaq: AMZN) were down more than 0.5% despite news that the online commerce giant will be launching Prime Day, a 20th anniversary sale aimed at boosting its subscription service, Amazon Prime. The company promises deals and savings much better than those found on Black Friday. The e-commerce giant turns 20 years old on July 15.
Stocks to Watch Today: FDO, DLTR, CMG, JBLU
- Stocks to Watch No. 1, FDO: On Thursday, discount retailer Dollar Tree Inc. (Nasdaq: DLTR) received final permission from the Federal Trade Commission to purchase Family Dollar Stores Inc. (NYSE: FDO). Under its agreement with the government, Dollar Tree's $8.5 billion deal will require the newly combined company to close 330 stores over the next 150 days.
- Stocks to Watch No. 2, CMG: Shares of Chipotle Mexican Grill Inc. (NYSE: CMG) were flat this morning after Barron's predicted the company's stock could slump another 15% to 20% if the company doesn't improve its growth prospects. The paper warned that the Mexican casual dining chain weakened guidance in April and projects that its decision to remove pork from one-third of its locations will likely hinder its 2015 sales figures. Year to date, CMG shares are down more than 10%.
- Stocks to Watch No. 3, JBLU: Following the reestablishment of diplomatic relations between Cuba and the United States, JetBlue Airways Corp. (Nasdaq: JBLU) announced plans to begin direct charter flights between New York and Havana, Cuba. The news makes JetBlue the first American airline to establish regular flights after the U.S. government relaxed travel restrictions to the country.
Today's U.S. Economic Calendar (all times EDT)
- Gallup US Consumer Spending Measure at 8:30 a.m.
- PMI Services Index at 9:45 a.m.
- Labor Market Conditions Index at 10 a.m.
- ISM Non-Manufacturing Index at 10 a.m.
- 4-Week Bill Announcement at 11 a.m.
- 3-Month Bill Auction at 11:30 a.m.
- 6-Month Bill Auction at 11:30 a.m.
- TD Ameritrade IMX at 12:30 p.m.
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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.