Futures for the Dow Jones Industrial Average Thursday, Dec. 17, 2015 were up 50 points this morning as traders make sense of yesterday's announcement by the Federal Reserve to increase the benchmark interest rate by 25 basis points. The decision pushed major financial institutions, including Wells Fargo & Co. (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC) to hike their prime rate - the benchmark interest rate offered to its most credit-worthy customers. Despite the optimism from this rate increase, there's a dirty secret buried in the headlines. It turns out that this rate hike will seriously fleece American taxpayers all over again.
On Wednesday, the Dow Jones Industrial Average gained 224 points after the U.S. Federal Reserve increased rates for the first time since 2006. The decision marks an end to its zero-interest-rate policy (ZIRP), at least temporarily. Fed Chairwoman Janet Yellen said the U.S. economy has "held up and grown at a solid pace" in 2015. She said continued growth or higher inflation could warrant further rate increases.
Oil Outlook: Oil priceswere mixed this morning on concerns about a global glut and news that the Fed boosted interest rates. January WTI prices were down 0.8% at $35.23 per barrel. Meanwhile, Brent oil crude - priced in London - were flat at $37.19.
Earnings Outlook: RHT, GIS, ACN, WGO, MCS
Earnings Report No. 1, RHT: After market close, Red Hat Inc. (NYSE: RHT) will report fiscal third-quarter earnings. Wall Street analysts project a consensus EPS of $0.46 on $521 million in revenue.
Earnings Report No. 2, GIS: Before the market opens, General Mills Inc. (NYSE: GIS) will report fiscal second-quarter earnings. Wall Street projects per-share earnings of $0.82 on $4.6 billion in revenue.
Additional companies reporting earnings today include Accenture plc (NYSE: ACN), Winnebago Industries Inc. (NYSE: WGO), and The Marcus Corp. (NYSE: MCS).
Stocks to Watch: SCTY, TSLA, P, FDX
Stocks to Watch No. 1: SCTY: Wednesday was a big day for entrepreneur Elon Musk. The Silicon Valley visionary earned almost $770 million on paper when two of his companies saw big stock gains. Shares of SolarCity Corp. (Nasdaq: SCTY) jumped 34%, while electric-car and battery manufacturer Tesla Motors Inc. (Nasdaq: TSLA) gained more than 6%. Shares popped after Congress said that it plans to extend a tax credit for renewable energy for an additional five years as part of its new spending bill.
Stocks to Watch No. 2: P: Shares of Pandora Media Inc. (NYSE: P) surged nearly 21% in post-market hours yesterday after the company learned that the increase in royalty rates paid to music studios for streaming rights was far less than expected. It's been a good two days for the firm. On Tuesday, Pandora signed a long-term deal with Warner/Chappell Music that will boost its music offerings. The house has the rights and publishes music to groups and individual stars like Madonna, Red Hot Chili Peppers, Eric Clapton, Green Day, and Katy Perry.
Stocks to Watch No. 3, FDX: Shares of FedEx Corp. (NYSE: FDX) were up more than 6% this morning on news that the global shipping giant beat per-share earnings expectations by seven cents and slightly topped bottom-line revenue calls. The firm announced an EPS of $2.58, while Wall Street expected $2.51. The company also reported quarterly revenues of $12.5 billion, besting expectations of $12.4 billion.
Today's U.S. Economic Calendar (all times EST)
Jobless Claims at 8:30 a.m.
Philadelphia Fed Business Outlook Survey at 8:30 a.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.