Good morning! For Oct. 15, 2015, here's your stock market news and stocks to watch...
Stock Futures Today
Futures for the Dow Jones Industrial Average today (Thursday) were up 77 points as Wall Street continues to eye economic data and a busy earnings week. With Q3 earnings growth expected to shrink, investors need to brace themselves for the possibility of a bear market over the next several months. Here's how to prepare and profit.
Yesterday, the Dow Jones Industrial Average dropped 157 points on a busy day of economic data and earnings reports. Shares of Wal-Mart Stores Inc. (NYSE: WMT) and Boeing Co. (NYSE: BA) weighed the Dow the most on the day. The retail giant hammered sentiment and fell more than 10% in early trading hours after the company lowered its growth and earnings outlook. Meanwhile, the aircraft stock slumped 4.4% after the company said it expects demand for narrow-body planes to decline within the next one to three years.
Top News in the Stock Market Today
- The Stock Market Today: Three members of the U.S. Federal Reserve will offer speeches on monetary policy, and the Department of Labor will report weekly jobless claims and the September update on the Consumer Price Index. Weakening economic data suggests the Federal Reserve is more unlikely to raise interest rates in 2015.
- Oil Outlook: Oil prices were sliding again this morning on news of preliminary U.S. crude inventory data. November futures for WTI crude were down 1% to $46.17 per barrel, while Brent crude slid 0.5% to $48.91. The American Petroleum Institute predicts crude stocks increased by 9.4 million barrels last week, a massive spike compared to consensus forecasts of a build of 2.8 million barrels. The EIA will release the official government inventory figure later this morning.
Earnings Outlook: GS, C, AMD, SLB, MAT, UNH, PM
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- Earnings Reports No. 1, GS: Before the bell, Goldman Sachs Group Inc. (NYSE: GS) shares slipped more than 1% after the company missed earnings expectations for the third quarter. The investment bank reported earnings of $2.90 per share, missing Wall Street expectations by a penny. The company said ongoing concerns about lackluster global economic growth put a damper on bond trading, which affected revenue in its fixed-income, currency, and commodity trading division. In that part of business alone, its revenue slipped 33%.
- Earnings Reports No. 2, C: This morning, Citigroup Inc. (NYSE: C) beat Wall Street earnings expectations for the third quarter. The bank reported adjusted earnings of $1.31 per share, up from $1.15 in the year-earlier period, and beating expectations of $1.28. The firm said revenue slipped to $18.49 billion from $19.98 billion a year ago. Its quarterly revenue was just slightly below consensus expectations. Shares of Citigroup were up 3.3% in pre-market hours.
- Additional companies reporting earnings include Advanced Micro Devices Inc. (Nasdaq: AMD), Schlumberger Ltd. (NYSE: SLB), Mattel Inc. (Nasdaq: MAT), UnitedHealth Group Inc. (NYSE: UNH), and Philip Morris International Inc. (NYSE: PM).
Pre-Market Movers: VRX, NFLX, BUD, SBMRY
- Pre-Market Movers No. 1, VRX: Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) are down more than 9% after the company officially received subpoenas from U.S. prosecutors. The pharmaceutical giant - backed by activist investor Bill Ackman - is under intense scrutiny over how it process its drugs and distributes them to patients.
- Pre-Market Movers No. 2, NFLX: Shares of Netflix Inc. (Nasdaq: NFLX) are down 4.5% in pre-market hours after the company reported weaker than expected quarterly profits. The company reported fewer new subscribers than expected, raising new concerns about recent price increases and its expansion into new global markets. Netflix said that 880,000 net subscribers joined the service over the quarter, down from the expected 1.25 million. The company also missed revenue estimates. Here's how you should play NFLX stock after the report.
- Pre-Market Movers No. 3, BUD: Global brewing giant Anheuser-Busch InBev SA (NYSE ADR: BUD) announced plans to sell bonds worth up to roughly $55 billion in order to finance its acquisition of rival SABMiller Plc. (OTCMKTS ADR: SBMRY). The deal, which is still subject to intense regulatory scrutiny, would create a record debt issuance for a company takeover. This amount of corporate debt would be greater than the GDP of more than 115 nations.
Today's U.S. Economic Calendar (all times EDT)
- Consumer Price Index at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Empire State Manufacturing Survey at 8:30 a.m.
- St. Louis Federal Reserve Bank President James Bullard speaks at 9:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Philadelphia Fed Business Outlook Survey at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- New York Federal Reserve Bank President William Dudley Speaks at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 30-Year TIPS Announcement at 11 a.m.
- Treasury Budget at 3:30 p.m.
- Cleveland Fed President Loretta Mester Speaks at 4:30 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
What Investors Must Know This Week
- The Fastest Way to Profit from a $709 Billion Industry Shift
- Five Tech Stocks That Soared While the Markets Tanked
- Here's Where the Next Oil Sector Profits Will Be Made
Follow us on Twitter: @moneymorning.
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About the Author
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.