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Stock Futures Today
Futures for the Dow Jones Industrial Average today (Monday, Sept. 28, 2015) were down 93 points as traders take a cautious approach ahead of three speeches by members of the U.S. Federal Reserve, a slew of economic data, and a looming budget debate in Washington, D.C. Investors are focused this week on two major data announcements: the monthly updates of manufacturing data from China and the U.S. unemployment rate.
On Friday, the Dow Jones Industrial Average gained 113 points on optimism from the Federal Reserve and an improved second-quarter GDP reading. Meanwhile, the S&P 500 and the Nasdaq fell after a massive sell-off in biotech stocks pushed the sector into bear territory. The biotech sector finished last week down more than 13%.
Last night, Fed Chairwoman Janet Yellen said there will likely be a fed fund rate increase "later this year, followed by a gradual pace of tightening thereafter." After the third and final revision by the U.S. Commerce Department, second-quarter GDP was up 3.9%, well ahead of consensus expectations of 3.7%.
Top News in the Stock Market Today
- The Stock Market Today: Today, three members of the Federal Reserve will speak on monetary policy, while the economic data calendar is headlined by existing home sales, the Dallas Fed Manufacturing Index, and Core Personal Income and Outlays. Global markets were in the red this morning after a report indicating that industrial production is slowing in China and foreign investors unloaded shares of Glencore Plc. (LON: GLEN) and Volkswagen AG (OTCMKTS ADR: VLKAY) on European exchanges.
- Oil Outlook: On Monday, oil prices slipped as the global demand outlook remained weak. WTI prices fell 1.7% to $44.88, while Brent crude prices slipped nearly 1.8% to $47.73. Significant levels of oversupply in emerging markets continue to weigh down prices and have fueled a number of different price outlooks that show prices remaining low through 2016 and beyond.
- Earnings Outlook: Companies reporting earnings include Vail Resorts Inc. (NYSE: MTN), Cal-Maine Foods Inc. (Nasdaq: CALM), Akorn Inc. (Nasdaq: AKRX), Energy XXI Ltd. (Nasdaq: EXXI), and SYNNEX Corp. (NYSE: SNX).
Pre-Market Movers: AA, CMCSA, MEG
- Pre-Market Movers No. 1, AA: Shares of aluminum giant Alcoa Inc. (NYSE: AA) were up more than 5.5% this morning on news that the firm plans to split into two businesses. The firm said it will split its aluminum and mining company from its "downstream" special metals division by the end of 2016. The upstream commodity division will keep the name Alcoa.
- Pre-Market Movers No. 2, CMCSA: Cable giant Comcast Corp. (NYSE: CMCSA) announced it has purchased a 51% stake in theme park operator USJ Co. – which operates Universal Studios Japan – for $1.5 billion. Investment banking giant Goldman Sachs Group Inc. (NYSE: GS), private equity firm MBK Partners, and several other firms will maintain the balance of USJ shares.
- Pre-Market Movers No. 3, MEG: Shares of Media General Inc. (NYSE: MEG) jumped more than 22% this morning on news that it will likely be purchase by Nexstar Broadcasting Group Inc. (Nasdaq: NXST) for roughly $4.1 billion.
Stocks to Watch: WMB, RDS.A, BUD
- Stocks to Watch No. 1, WMB: M&A activity is heating up again on Monday. This morning, Energy Transfer Equity LP (NYSE: ETE) announced plans to purchase Williams Cos. Inc. (NYSE: WMB) for roughly $37.7 billion. The deal is worth a 4.6% premium to Friday's closing price.
- Stocks to Watch No. 2, RDS.A: Global energy giant Royal Dutch Shell Plc. (NYSE: RDS.A) announced plans to halt exploration in Arctic waters off the coast of Alaska. The stunning announcement comes after the firm received permission from the Obama administration to drill and the company invested at least $7 billion and years of production preparation.
- Stocks to Watch No. 3, BUD: The Sunday Times announced yesterday morning that Anheuser-Busch InBev SA (NYSE ADR: BUD) may prepare a bid for rival SABMiller Plc. (OTCMKTS ADR: SBMRY) this week that could be worth at least $106 billion. The deal would allow the maker of Budweiser to gain access to Asian and African markets where it has struggled to gain much traction.
Today's U.S. Economic Calendar (all times EDT)
- New York Federal Reserve Bank President William Dudley speaks at 7:45 a.m.
- Personal Income and Outlays at 8:30 a.m.
- Pending Home Sales Index at 10 a.m.
- Dallas Fed Manufacturing Survey at 10:30 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.
- Chicago Federal Reserve Bank President Charles Evans speaks at 1:30 p.m.
- San Francisco Federal Reserve Bank John Williams speaks at 5 p.m.
What Investors Must Know This Week
- The One Stock to Profit from China's Trillion-Dollar Megaproject
- CHARTS: Gold Price Forecast Sees Rise Before 2016
- How to Protect Against the Biggest Threat to Your Money Today
Follow us on Twitter @moneymorning.
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.