Futures for the Dow Jones Industrial Average on Monday, Aug. 10 forecast a 122-point gain as the markets reacted to a downswing in the Chinese economy and anticipated additional stimulus from the nation's central bank.
On Friday, 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. According to reports this morning, domestic factory activity slumped in July and consumer spending fell to its lowest levels in four months. That's raising new concerns about the broader health and momentum of the U.S. economy. Meanwhile, China's manufacturing activity fell more than expected. The news dragged down stocks with broad exposure to the world's second-largest economy.
Top News in the Stock Market Today
The Stock Market Today: Today, traders will continue to speculate as the June-ending earning seasons winds down and focus on the potential timing of a rate hike by the U.S. Federal Reserve. Roughly 88% of S&P 500 companies have already reported earnings for the June-ending quarter results. Members of the Fed Open Market Committee will meet in September to discuss the timing of its first interest-rate hike in nearly a decade. On Friday, the U.S. Commerce Department reported that the official unemployment rate remained unchanged at 5.3%.
Oil Outlook:Oil prices hovered near their lowest levels since March after China reported weaker than expected trade data. WTI crude futures for September gained 0.5% to hit $44.08 per barrel. Meanwhile, Brent oil prices added 0.9% to hit $49.06 per barrel.
Earnings Reports: Companies reporting earnings include Rackspace Hosting Inc. (NYSE: RAX), Procter & Gamble Co. (NYSE: PG), Informatica Corp. (Nasdaq: INFA), Sysco Corp. (NYSE: SYY), Take-Two Interactive Software Inc. (Nasdaq: TTWO), and Dean Foods Co. (NYSE: DF).
Pre-Market Movers in the Stock Market Today: PCP, BRKA, RNF, SHAK
Pre-Market Movers No. 1, PCP: Shares of Precision Castparts Corp. (NYSE: PCP) gained nearly 19% this morning on news that Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) announced plans to purchase the aircraft components manufacturer for roughly $37.2 billion, including debt. Buffett said that his company is unlikely to make another big acquisition over the next 12 months after this "strategic" purchase.
Pre-Market Movers No. 2, RNF: Shares of Rentech Nitrogen Partners LP (NYSE: RNF) surged more than 21% on news that CVR Partners LP (NYSE: UAN) planned to purchase the nitrogen fertilizer producer for $533 million.
Pre-Market Movers No. 3, SHAK: Shares of Shake Shack Inc. (NYSE: SHAK) were up nearly 3.6% this morning as the company prepares to report second-quarter earnings of $0.03 per share. The company doesn't have any comparable public data as it completed its IPO in January.
Stocks to Watch No. 1, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) were up 1.1% this morning. The company announced plans to unveil its latest iPhone and Apple TV during the week of Sept. 7. Apple stock has fallen by $11 since July 21, the day before the firm reported its quarterly results. Apple stock has been weakened by irrational expectations on Wall Street. But we're sticking to a $200 price target for the company. Here's a breakdown on how you can make 74% on Apple stock.
Stocks to Watch No. 2,AXP: Shares of credit-card giant American Express Co. (NYSE: AXP) slipped this morning by 0.5% after surging on Friday. Activist hedge fund ValueAct Capital Management announced it has taken a $1 billion stake in the company. The 5% stake in the firm will allow it to focus on boosting shareholder value and helping the company rebound from a difficult year that saw purchases with its credit cards decline.
Stocks to Watch No. 3, LNG: Shares of Cheniere Energy Inc. (NYSEMKT: LNG) were up another 3.3% this morning as traders react to news that activist investor Carl Icahn led a team that has taken an 8.2% stake in the company. Icahn built the position, valued at more than $1 billion, after saying he believed the stock to be cheap. Icahn plans to speak to the company's board about efforts to slash company expenses and boost shareholder value. Here's insight from Money Morning Global Energy Strategist Dr. Kent Moors on why Icahn's deal is so important both for Icahn's hedge fund and for the future of domestic natural gas exports.
Today's U.S. Economic Calendar (all times EDT)
Labor Market Conditions 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.
Atlanta Federal Reserve President Dennis Lockhart speaks at 12:25 p.m.
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.
