Futures for the Dow Jones Industrial Average today forecast a 31-point decline as the markets prepare for an important week of earnings in the wake of China's recent devaluation of its currency. A number of large Chinese retail importers like Target Corp. (NYSE: TGT), Wal-Mart Stores Inc. (NYSE: WMT), and Home Depot Inc. (NYSE: HD) are set to report earnings this week.
On Friday, the Dow Jones Industrial Average was up 69 points as positive economic domestic data and strong retail earnings reports offset concerns about China's devaluation of its currency and placed growth directly in focus. On Friday, shares of J.C. Penney Co. Inc. (NYSE: JCP) and Nordstrom Inc. (NYSE: JWN) both gained more than 4% on stronger than expected earnings reports.
Top News in the Stock Market Today
The Stock Market Today: Today, investors will look to the monthly housing index, an update on e-commerce retail sales, and the Empire Manufacturing Survey. Investors are gearing up for Wednesday when the U.S. Federal Reserve will release minutes from its most recent meeting on monetary policy.
Oil Outlook: On the global front, Japan became the latest advanced economy to report a setback in the second quarter. Oil prices slid again on the news that Japan's economy shrank by 1.6% in the quarter due to falling exports and steep cuts in consumer spending. WTI crude futures for September fell 1.7% to hit $41.76 per barrel. Meanwhile, Brent oil prices dipped nearly 0.3% to $48.51 per barrel.
Earnings Reports: Companies reporting earnings include Urban Outfitters Inc. (Nasdaq: URBN), Estee Lauder Co. Inc. (NYSE: EL), Actavis Inc. (NYSE: ACT), Fabrinet (NYSE: FN), and Akorn Inc. (Nasdaq: AKRX).
Pre-Market Movers in the Stock Market Today: EL, TMUS, ETH
Pre-Market Movers No. 1, EL: Shares of Estee Lauder Co. Inc. (NYSE: EL) were down 2.1% as it prepares to report earnings today. The company is one of the first high-end luxury retailers to report its quarterly earnings after China's surprise devaluation. Investors will be eager to hear how the company forecasts its second-half 2015 outlook.
Pre-Market Movers No. 2, TMUS: Shares of T-Mobile US Inc. (NYSE: TMUS) were up marginally this morning, despite news on Friday that hedge fund manager Dan Loeb and his firm Third Point purchased 6.5 million shares in the telecommunications giant. The stock is trading near a 52-week high but has an eye-popping P/E ratio of nearly 125.
Pre-Market Movers No. 3, ETH: Shares of Ethan Allen Interiors Inc. (NYSE: ETH) were up more than 1.2% this morning on news that activist fund Sandell Asset Management is pushing the firm to sell itself to a private equity firm or sell its real estate portfolio. Sandell plans to nominate its own directors to Ethan Allen's board and maintains significant influence due to its 5.5% stake in the company.
Stocks to Watch No. 1, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) were near a seven-month low this morning on news that activist hedge fund manager David Einhorn has slashed his position in the technology giant. In a filing with the U.S. Securities and Exchange Commission, the head of Greenlight capital announced he'd cut his position by roughly 60,000 shares. In addition, the company announced it has increased its holdings in auto giant General Motors Inc. (NYSE: GM) and energy utility firm UIL Holdings Corp. (NYSE: UIL). The news comes as Apple stock is slumping over the Chinese devaluation of currency. The tech giant earns roughly 23% of its annual revenue from China, and a depreciating currency will make its products more expensive in the world's second largest economy.
Stocks to Watch No. 2, CMCSA: Shares of Comcast Corp. (Nasdaq: CMCSA) were largely unchanged this morning despite news that its film entertainment arm Universal Pictures led the box office over the weekend with the release of the hip-hop biopic "Straight Outta Compton." The film earned $56 million over its debut weekend, making the film Universal's best performing R-rated film release in August since 2001. The studio has now pulled in more than $5.76 billion since the beginning of 2015.
Stocks to Watch No. 3, AMZN: Shares of Amazon.com Inc. (Nasdaq: AMZN) are in focus today after a New York Times company profile painted a questionable image of its corporate culture. The story reported the e-commerce giant pushes sick employees or parents out of the company, encourages workers to report others over individual flaws, and creates a difficult environment where employees regularly argue and are encouraged to do so. Amazon stock was unmoved before the bell.
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 Bank 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.
