Futures for the Dow Jones Industrial Average today (Tuesday, Oct. 6, 2015) were down 13 points as traders began to eye earnings reports and mixed economic data. The unofficial beginning to earnings season begins on Thursday when Alcoa Inc. (NYSE: AA) reports after the bell.
On Monday, the Dow Jones Industrial Average gained more than 304 points as traders now anticipate the U.S. Federal Reserve will not raise interest rates in 2015 after Friday's weaker than expected jobs report. Yesterday morning, the United States and 11 other Pacific Rim nations announced an agreement on the Trans-Pacific Partnership (TPP), the most ambitious trade pact in decades. Despite significant skepticism from Congress, the new deal will create a massive free-trade zone that comprises 40% of the global economy.
Top News in the Stock Market Today
The Stock Market Today: On Tuesday, traders will keep an eye on an update on the U.S. trade balance level for August and a speech from San Francisco Federal Reserve Bank President John Williams, who will discuss the regional bank's outlook for the U.S. economy.
Overseas Cash: According to the Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund, the 500 largest U.S. companies currently hold more than $2.1 trillion in offshore profits that are being held to avoid paying taxes. According to calculations, the companies would owe roughly $620 billion in taxes if they were repatriated. Atop the list, Apple Inc. (Nasdaq: AAPL) currently has $181.1 billion offshore, which would cost the firm $59.2 billion in taxes if repatriated.
Earnings Outlook: Companies reporting earnings today include Yum! Brands Inc. (NYSE:YUM), PepsiCo Inc. (NYSE: PEP), Team Inc. (NYSE: TISI), and NovaGold Resources Inc. (NYSEMKT: NG).
Oil Outlook: Oil prices were mixed this morning as the broader market was looking for greater support from global producers. Yesterday, oil prices hit a two-week high after Russia announced it wants to speak with OPEC producers about ways to address the low price environment. This morning, WTI prices slipped 0.1% to hit $46.22 per barrel. Meanwhile, Brent crude prices were up 0.5% to $49.50.
Pre-Market Movers No. 1, PEP: Shares of PepsiCo Inc. (NYSE: PEP) gained more than 2.2% this morning after the company said it beat consensus earnings and revenue forecasts. The company announced an earnings per share (EPS) of $1.35, ahead of Wall Street expectations by $0.09. The company also raised its full-year forecast.
Pre-Market Movers No. 2, DD: Shares of DuPont Co. (NYSE: DD) gained 5.8% after the company said that CEO Ellen Kullman will step down. The resignation comes as part of building pressure from activist investor Nelson Peltz. The company also announced that it has slashed its operating earnings for the year from $3.10 to $2.75.
Pre-Market Movers No. 3, PMCS: Shares of PMC-Sierra Inc. (Nasdaq: PMCS) surged more than 32% this afternoon on news that the chipmaker will be purchased by Skyworks Solution Inc. (Nasdaq: SWKS) - a major supplier of Apple Inc. - for roughly $2 billion. Shares of Skyworks gained 1.8% this morning.
Stocks to Watch: ILMN, STRZA, LGF
Stocks to Watch No. 1, ILMN: Shares of Illumina Inc. (Nasdaq: ILMN) plunged more than 16.2% after the company slashed its sales outlook for the balance of its fiscal year. The genetic sequencing firm said that sales remain weak in both Japan and Europe, raising concerns about its near-term performance.
Stocks to Watch No. 2, STRZA: M&A activity is coming to Hollywood. Shares of Starz (Nasdaq: STRZA) were up more than 7.2% on news that the company is in advanced talks to combine operations with Lions Gate Entertainment Corp. (USA) (NYSE: LGF). Shares of LGF were up more than 2.6% before the bell.
Today's U.S. Economic Calendar (all times EDT)
International Trade at 8:30 a.m.
Gallup US ECI at 8:30 a.m.
Redbook at 8:55 a.m.
Kansas City Federal Reserve Bank President Esther George speaks at 9:15 a.m.
4-Week Bill Auction at 11:30 a.m.
3-Year Note Auction at 1 p.m.
Treasury STRIPS at 3 p.m.
San Francisco Federal Reserve BankJohn Williams speaks at 3:30 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.
