Futures for the Dow Jones today forecast a 19-point decline on concerns about falling oil prices and expectations for a number of core Dow components' earnings statements.
Yesterday, the Dow Jones Industrial Average fell 91 points as traders expressed concerns about cratering oil prices and conditions in the Chinese, European, and U.S. economies. Weak economic data has investors re-estimating the target date for an interest rate hike by the U.S. Federal Reserve.
On the domestic front, consumer spending hit a snag on Monday, registering its smallest increase in four months; meanwhile, manufacturing growth slipped in July. This comes just days after wage growth cooled to multi-decade lows and the U.S. Commerce Department reported a good-but-not-great second-quarter GDP growth figure of 2.3%.
The weakness has many anticipating that the Fed will wait until December to tighten monetary policy instead of their recent projections of September.
Top News in the Stock Market Today
The Stock Market Today: Today, traders will continue to monitor a busy economic calendar that includes factory orders for the month of June and Gallup's Economic Confidence Index.
Puerto Rico Defaults: On Monday, Puerto Rico confirmed it had only paid $628,000, or 1%, of a $58 million debt payment due on Public Finance Corp. bonds. The nation is $72 billion in debt, and Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla, said last week that the commonwealth doesn't have the money to meet its obligations. This is the first time that a U.S. commonwealth has ever defaulted on its bond payments, raising new concerns about the stability of the U.S territory and its economic future.
Oil Outlook:Oil prices ticked up this morning after a 5% decline in prices and news that economists anticipate a weak outlook for the balance of the year. WTI crude futures for September added 1.5% to hit 45.86 per barrel. Meanwhile, Brent oil prices added nearly 1.6% to hit $50.30 per barrel.
Earnings Reports: Companies reporting earnings today include Archer Daniels Midland Co. (NYSE: ADM), Coach Inc. (NYSE: COH), DreamWorks Animation SKG Inc. (Nasdaq: DWA), First Solar Inc. (Nasdaq: FSLR), Holly Energy Partners LP (NYSE: HEP), Kellogg Co. (NYSE: K), LendingClub Corp. (NYSE: LC), Mosaic Co. (NYSE: MOS), NRG Energy Inc. (NYSE: NRG), Sprint Corp. (NYSE: S), Walt Disney Co. (NYSE: DIS), Western Refining Inc. (NYSE: WNR), Zillow Group Inc. (NYSE: Z), Zoetis Inc. (NYSE: ZTS), and CVS Caremark Corp. (NYSE: CVS).
Pre-Market Movers in the Stock Market Today: S, AIG, SHPG, BXLT
Pre-Market Movers No. 1, S: Shares of Sprint Corp. (NYSE: S) were up nearly 4.5% this morning on news the nation's third-largest cellular operator announced that its CFO Joseph Euteneuer will be leaving the company during its quarterly earnings report. The firm reported lower revenue than Wall Street had anticipated but did hike its 2015 guidance outlook.
Pre-Market Movers No. 2, AIG: Shares of American International Group Inc. (NYSE: AIG) slipped more than 0.5% this morning despite the fact that the company more than doubled its dividend and increased its buyback program by $5 billion. AIG beat quarterly profit figures by $0.17 per share, banking $1.39 per share.
Pre-Market Movers No. 3, SHPG: Shares of Shire Plc. (Nasdaq ADR: SHPG) slipped 3.3% this morning after the company made a $30.6 billion all-stock hostile takeover bid for rare-disease treatment maker Baxalta Inc. (NYSE: BXLT). This is another example of foreign firms using their more-favorable tax status to purchase a U.S. company following the U.S. Treasury Department's hasty ruling on domiciling abroad by American-based firms.
Stocks to Watch No. 1, ADM: Shares of Archer Daniels Midland Co. (NYSE: ADM) were off more than 2% this morning after the global agricultural giant reported weaker than expected quarterly estimates. The grain giant missed earnings estimates by $0.06 and said a massive boost in ethanol production negatively affected its profit margins.
Stocks to Watch No. 2, ACI: Shares of Arch Coal Inc. (NYSE: ACI) cratered more than 90% yesterday after the company filed for bankruptcy. The news came the same day that President Obama's Environmental Protection Agency said it's in the final stages of preparing new regulations that would require significant decreases in carbon emissions over the next decade. The news sent shares of coal stocks into a free fall as the new regulations would require a 30% reduction in carbon emissions from coal-fired power plants. Shares of Peabody Energy Corp. (NYSE: BTU) fell by more than 10%, while shares of Cloud Peak Energy Inc. (NYSE: CLD) fell by 8.5% on Monday.
Stocks to Watch No. 3, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) continue to decline this morning, down another 0.8%. The stock is now off more than 12% from its April high, moving the stock into correction territory.
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.
