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For Jan. 8, 2016, here's the top stock market news and stocks to watch…
Stock Futures Today
Futures for the Dow Jones Industrial Average today (Friday) forecast a 200-point gain as China's stock markets stabilized. That calmed nerves across most Asian and European stock exchanges. The Dow has experienced its worst four-day start to a new year since the index increased to 30 stocks in 1928.
At 8:30 a.m., the U.S. Labor Department released the December jobs report. The U.S. economy added 292,000 jobs last month. The unemployment rate remained unchanged at 5.0%.
The Labor Department also revised the October and November reports upward an additional 50,000 jobs combined. In addition, the agency stated that warm December weather had little to do with the strong jobs figure.
On Thursday, the 2016 China stock market meltdown hammered the Dow Jones Industrial Average after Chinese stocks fell 7% and triggered circuit breakers for the second time this week. The Dow Jones Industrial Average cratered more than 392 points while the Nasdaq pushed into correction territory, falling more than 3%. The tech-laden index lost a stunning 146 points on concerns the People's Bank of China may continue to devalue its currency.
Top News in the Stock Market Today
- The Stock Market Today: On Friday, the markets will look to move beyond China's stock market slump and hope to find some positive momentum in U.S. economic data. The busy economic calendar includes the December unemployment report, a monthly update on wholesale trade, the weekly Baker Hughes Inc. (NYSE: BHI) rig count, and a report on U.S. consumer credit.
- Thank the Fed: Immediately after the U.S. Federal Reserve's decision to hike interest rates on Dec. 16, large-cap financial companies – the ones known as "Too Big to Fail" – surged to monthly highs as investors anticipated the rate hike would fuel higher profits. But these stocks have slumped heavily since as exposure to China and renewed concerns about credit spread around the markets. Shares of Wells Fargo & Co. (NYSE: WFC) are down 10.5% since hitting an intraday high of $56.11 after the Fed announcement. JPMorgan Chase & Co. (NYSE: JPM) is down 8.87% over the last 30 days, while Morgan Stanley (NYSE: MS) stock has fallen nearly 15% from its one-month high.
- Las Vegas Winnings: The Consumer Electronics Show (CES) kicked off Wednesday in Las Vegas. The annual event is one of the biggest weekends of the year for tech investors as companies gather to show off their newest gadgets and discuss corporate strategy for the years ahead. And big profits can be made by savvy investors who recognize the earnings potential of the next big thing. But Money Morning Options Expert Tom Gentile shows you how to maximize these profit opportunities in three specific companies that are poised to revolutionize entire industries with their latest product launches. Here are the stocks and strategies to play.
- Oil Outlook: Crude oil prices lifted off 12-year lows this morning as Chinese stocks reversed course and calmed a growing panic. February's WTI prices were up 1.0% at $33.59 per barrel. Meanwhile, Brent oil added 1.0% to hit $34.08. Yesterday, oil prices dipped below $33 for the first time since 2003 as China's market slump pushed investors out of the sector on concerns regarding oversupply and cratering demand from the world's second-largest economy. Meanwhile, traders are still keeping a close eye on ongoing tensions between Saudi Arabia and Iran after the former was accused of striking the latter's embassy in Yemen.
Earnings Outlook: AYI, AZZ, SYRG
- Earnings Report No. 1, AYI: This morning, Acuity Brands Inc. (NYSE: AYI) will report first-quarter earnings. The company is expected to report an EPS of $1.60 on top of $739.8 million in revenue.
- Earnings Report No. 2: AZZ: Shares of AZZ Inc. (NYSE: AZZ) are in focus as the company reports fiscal third-quarter earnings. The company's earnings per share level beat Wall Street expectations of $0.90 by a penny, but fell short of consensus revenue forecasts.
- Additional companies set to report earnings today include Synergy Resources Corp. (Nasdaq: SYRG).
Stocks to Watch: NFLX, GPS, M, JWN, AAPL, TWX
- Stocks to Watch No. 1, NFLX: A word of caution to Netflix Inc. (Nasdaq: NFLX) investors. Although the stock showed strong momentum earlier this week on news that the company was expanding into another 130 countries in the near future – including major emerging markets like India – the stock has retreated since, falling 2.6% on Thursday. That's because analysts have slowly determined the international growth that seems so promising is expected to take years before the firm turns a profit in these countries. Shares of NFLX were up marginally in pre-market hours. However, Money Morning Defense & Tech Specialist Michael A. Robinson says that Netflix will reward investors who are patient, and its expansion will be a remarkable long-term profit play.
- Stocks to Watch No. 2, GPS: Shares of Gap Inc. (NYSE: GPS) are down this morning after the company reported that its core store sales fell 5% in December. The retailer isn't immune to a difficult holiday season. According to industry reports, Standard & Poor's is reviewing the credit ratings of both Macy's Inc. (NYSE: M) and Nordstrom Inc. (NYSE: JWN), and both firms could face a downgrade.
- Stocks to Watch No. 3, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) slipped below $100 for the first time in 15 months as concerns about its iPhone production levels and exposure to China worried analysts. Since December, the company has dropped more than $100 billion of its market capitalization.
- Stocks to Watch No. 4, TWX: Shares of Time Warner Inc. (NYSE: TWX) gained 2.2% on news that an active shareholder group may press the media giant to divest or spin off its successful HBO franchise. The company also announced that the sixth season of "Game of Thrones" will premiere on April 24.
Today's U.S. Economic Calendar (all times EST)
- Employment Situation at 8:30 a.m.
- Wholesale Trade at 10 a.m.
- Baker-Hughes Rig Count at 1 p.m.
- Consumer Credit at 3 p.m.
- Treasury STRIPS at 3 p.m.
What Investors Must Know This Week
- Where We'll Find Our Biggest Profits This Year
- What a Chinese Stock Market Crash Means for Investors
- Your "Buy List" to Profit from Volatility in 2016
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.