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Dow Futures Today
Dow futures today (Thursday) forecast a 53-point gain as European markets rallied more than 1% as investors eyed the progress of Greece's bailout program and China's attempts to stabilize its economy in the wake of its largest one-day currency devaluation since 1994. The markets hope that the yuan stabilizes after three days of devaluation against the U.S. dollar.
Yesterday, the Dow Jones Industrial Average reversed course from an early triple-digit slump and finished only slightly down on Wednesday despite concerns about the Chinese currency devaluation. Companies with broad exposure to the Chinese economy were hit the hardest on the day.
Notable decliners on Wednesday included McDonald's Corp. (NYSE: MCD), down 0.5%; Yum! Brands Inc. (NYSE: YUM), down more than 3.4%; and Fiat Chrysler Automobiles NV (NYSE: FCAU), which declined more than 5.9%. Casinos were also hit hard as the downturn in Macau gambling puts increased pressure on the sector. Shares of both Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts Ltd. (Nasdaq: WYNN) slipped more than 1.6%.
Top News in the Stock Market Today
- The Stock Market Today: Investors will focus on weekly jobless claims, the monthly retail sales report, and an update to the U.S. Federal Reserve's balance sheet. Attention will also be drawn to a busy day of earnings reports in the retail sector, which received a big of a blow after Macy's Inc. (NYSE: M) reported weaker than expected profits on Wednesday.
- The Fed in Focus: China's third devaluation in three straight days (down 1.9%, 1.6%, and 1.1%, respectively) could affect the Federal Reserve's plans to raise interest rates during the fall. Meanwhile, the ongoing devaluation is negatively affecting American companies with broad exposure to China's economy, including technology giant Apple Inc. (Nasdaq: AAPL).
- Oil Outlook: Oil prices received a bump on optimism for growing global demand. WTI crude futures for September gained 0.3% to hit $43.45 per barrel. Meanwhile, Brent oil prices added 1.2% to $50.29 per barrel. Money Morning Global Energy Strategist Dr. Kent Moors explains what China's surprise currency announcement means for oil prices, and, more importantly, offers his outlook for when prices will return to the $70 range. Read it all here.
- Earnings Reports: Companies reporting earnings on Thursday include Nordstrom Inc. (NYSE: JWN), Applied Materials Inc. (Nasdaq: AMAT), Aspen Technology Inc. (Nasdaq: AZPN), Advanced Auto Parts Inc. (NYSE: AAP), Kohl's Corp. (NYSE: KSS), and King Digital Entertainment Plc. (NYSE: KING).
Pre-Market Movers in the Stock Market Today: BABA, S, T, VZ, TMUS, TSLA
- Pre-Market Movers No. 1, BABA: Shares of Alibaba Group Holding Ltd. (NYSE: BABA) slumped more than 5% to close at a record low on Wednesday after the company reported weak quarterly earnings results. The firm reported its slowest growth rate in five years, and results were only affected more by China's decision to devaluate its currency. The stock hit a 52-week high in November, but it has now slipped more than 38%. Shares are back up this morning, roughly 0.8%. Here's how you should play BABA stock after yesterday's earnings report.
- Pre-Market Movers No. 2, S: Shares of Sprint Corp. (NYSE: S) surged more than 6.6% this morning on news the company will be receiving another round of investment – this one totaling $87 million – from Japan's SoftBank Group Corp. (OTCMKTS: SFTBF). The Japanese tech firm is the majority owner of Sprint and is providing financial support as the company continues to struggle in a competitive U.S. market dominated by AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and T-Mobile US Inc. (NYSE: TMUS). Last week, Sprint reported a small quarterly loss, but beat Wall Street expectations.
- Pre-Market Movers No. 3, TSLA: Shares of Tesla Motors Inc. (Nasdaq: TSLA) gained nearly 2% this morning after the electric-vehicle maker announced plans to raise roughly $500 million through a sale of company stock. The firm's CEO Elon Musk announced plans to purchase roughly $20 million in stock.
Stocks to Watch Today: LNVGY, GOOG
- Stocks to Watch No. 1, LNVGY: Chinese technology giant Lenovo Group Ltd. (OTCMKTS ADR: LNVGY) is still reeling from its poor $3 billion acquisition of Motorola's hardware business after it attempted to boost its international presence as a provider of mobile handsets. The company announced it will lay off 10% of its white-collar employees after its Motorola hardware sales declined by more than 30%. Shares of Lenovo were down 1.4% on the day, its decline largely tied to broader concerns about the Chinese economy.
- Stocks to Watch No. 2, GOOG: Shares of Google Inc. (Nasdaq: GOOG, GOOGL) are in focus today after a strong upgrade by investment firm Stifel has deemed the company the "Berkshire Hathaway of the Internet." In a report issued by Stifel analyst Scott Devitt, the report moves Google from a "Hold" to a "Buy" with a target price of $850. The analyst says the company's plans to create its holding company Alphabet Inc. will allow the firm to report earnings from its core business and its more speculative divisions separately. The analysts projects the potential of a "multiyear stock run."
Today's U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- Retail Sales at 8:30 a.m.
- Import and Export Prices at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Business Inventories 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.
- 52-Week Bill Announcement at 11 a.m.
- 5-Year TIPS Announcement at 11 a.m.
- 30-Year Bond Auction at 1 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
What Investors Must Know This Week
- Why We're Still Bullish on Apple Stock (Nasdaq: AAPL)
- The Best Way to Add Gold to Your Portfolio Today
- The 4 Real Reasons Oil Prices Are Slipping – and How to Profit
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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.