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Dow Futures Today
Futures for the Dow Jones Industrial Average today (Wednesday) forecast a 107-point gain. This morning, the markets trimmed gains in the final pre-market hour after ADP reported the U.S. private sector created 190,000 jobs in August, down from economist expectations of 201,000. The data provides a hint into Friday's August employment report, the final such update before the U.S. Federal Reserve's meeting on Sept. 16-17, where the central bank will decide whether it will raise interest rates.
Yesterday, the Dow Jones Industrial Average cratered 469 points as investors weighed new concerns over manufacturing growth in the world's second-largest economy. The New York Stock Exchange implemented a little-used provision called Rule 48 in order to preempt panic selling and ensure orderly trading in times of extreme volatility. This is the second time the NYSE has implemented the rule in the last seven trading sessions. It was the third-largest single-day decline of 2015.
Two reports indicated China's manufacturing sector is ensnared in its worst downturn in several years. The nation's August Purchasing Managers' Index (PMI) dipped to 49.7, down from a reading of 50 in July. Meanwhile, U.S. manufacturing activity was on the decline as well. The August ISM manufacturing index slipped to 51.1 from 52.7 in July. This is the weakest ISM report in more than two years.
Top News in the Stock Market Today
- The Stock Market Today: Investors will keep an eye on the August ADP employment report, a weekly update on energy crude supplies from the U.S. Energy Information Administration, and an update on mortgage applications. But speculation centers entirely on the timing of the Federal Reserve's interest rate hike and whether the first will come in September. Yesterday, Boston Fed President Eric Rosengren said the labor market has seen enough progress to warrant a rate hike; however, the Fed remains uncertain on whether the inflation raise is poised to rise toward the central bank's target of 2% in a "reasonable time frame."
- Shut Down: The Chinese markets will be closed on Thursday and Friday as the nation commemorates the 70th anniversary of the end of World War II. The hiatus is likely a much-needed break after this week's downturn has rattled investors.
- Oil Outlook: Domestic WTI oil prices were sliding after investors took gains off the table from yesterday's surge in prices. On Monday, oil prices swelled after U.S. energy production fell and the Organization of Petroleum Exporting Countries (OPEC) raised concerns about a prolonged low oil price environment in a publication. This morning, WTI prices fell nearly 3% to reach $47.81. Meanwhile, Brent oil prices declined more than 2.1% to $52.99 per barrel.
- Earnings Reports: Companies reporting earnings include Vera Bradley Inc. (Nasdaq: VRA), Five Below Inc. (Nasdaq: FIVE), G-III Apparel Group Ltd. (Nasdaq: GIII), Oxford Industries Inc. (NYSE: OXM), and ABM Industries Inc. (NYSE: ABM).
Pre-Market Movers in the Stock Market Today: HRB, AAPL, AMBA, GPRO
- Pre-Market Movers No. 1, HRB: Shares of H&R Block Inc. (NYSE: HRB) were in focus this morning after the tax-preparation giant announced plans to introduce a $3.5 billion stock buyback program. The deal was announced after the company reported a smaller than expected quarterly revenue loss and said the sale of its banking business had closed one month prior to when its leadership team had expected.
- Pre-Market Movers No. 2, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) are up more than 1.7% this morning and raising eyebrows across the media sector on news that it's exploring its options in terms of creating its own original content. The tech giant would directly take on other streaming content providers like Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN), and Hulu. Netflix stock was up more than 2.4% this morning.
- Pre-Market Movers No. 3, AMBA: Shares of Ambarella Inc. (Nasdaq: AMBA) fell more than 8% after the chip maker announced risks to its future bottom line over concerns related to the third-quarter earnings report of GoPro Inc. (Nasdaq: GPRO). The firm announced quarterly per-share earnings of $0.88, topping Wall Street expectations of $0.80. The company also beat earnings estimates as well; however, the firm is one of GoPro's top semiconductor suppliers.
Stocks to Watch Today: TFM, PM
- Stocks to Watch No. 1, TFM: Shares of grocery giant The Fresh Market Inc. (Nasdaq: TFM) were flat in pre-market hours on news the company's board announced that Richard Anicetti will take over as the company's new CEO and president. Anicetti is the former CEO of Food Lion, where he served in the role for roughly eight years. The grocer's stock is off roughly 50% from its 52-week high.
- Stocks to Watch No. 2, PM: Shares of Philip Morris International Inc. (NYSE: PM) are in focus after the global tobacco manufacturer said it is considering a sale of its Indonesian cigarette unit. The deal could raise more than $1.5 billion for the firm.
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Productivity and Costs at 8:30 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Factory Orders at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Beige Book at 2 p.m.
What Investors Must Know This Week
- Is This a Bear Market? This Indicator Says Yes
- S. Dollar Drops as Global Stock Markets Decline
- Oil Price Forecast Shows Oil Headed for a Rebound
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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.