Dow Jones Industrial Average Rallies Ahead of Fed Minutes

dow jones industrial averageWe're off to a triple-digit start for the Dow Jones Industrial Average this morning as traders lock their stare on U.S. Federal Reserve Chairwoman Janet Yellen and hope a fragile geopolitical deal can help oil prices find a floor. This morning's gains seem a bit tame given the rally this morning in European markets, where leading indices in Germany and France both surged more than 2%. Looks like domestic traders know better than to get overly optimistic about the Fed's recent policy meeting...

Let's jump into what traders are chatting about this morning.

For Feb. 17, 2016, here's your top stock market news, stocks to watch, and economic calendar.

Dow Futures Today

Futures for the Dow Jones today (Wednesday) forecast a 115-point gain, but we know that could change quickly given recent volatility. Here's what pushed the Dow higher this morning and what you need to watch later today.

  • Oil prices rallied again overnight, with global Brent prices surging 3% to $33.15 per barrel. The action is fueled by a deal to freeze production levels by Russia and Saudi Arabia to stop the global price free fall. With several other producers on board, the focus now shifts to Iran, who recently started bringing oil back online to the global markets. This morning, the nation's OPEC minister called a domestic production freeze "illogical;" however, he is meeting with other cartel leaders to discuss the proposal.
  • Keep an eye on housing stocks today, as the market took a bit of a hit in January. According to data just released, housing starts and building permits fell last month as a slew of bad weather and stalled construction projects pushed expectations down for the year ahead. We'll see how investors treat shares of homebuilders like Toll Brothers Inc. (NYSE: TOL) and KB Home (NYSE: KBH), which are already hovering near 52-week lows. Our bet? It's not going to be a good day for the industry.
  • Yesterday, the Dow gained 222 points as traders shook off their holiday hangovers and pushed the markets higher despite another wild day of oil price swings. The Nasdaq also jumped more than 2.2% thanks to a strong rally in the technology sector.
  • This afternoon, all eyes will be on the minutes from the January FOMC meeting. Traders are looking for any insight on what the Federal Reserve has thought of the market's downturn, especially the horrible performance of the banking sector since the central bank hiked interest rates in December. Though Yellen says the central bank is still going to boost rates again, the markets simply don't believe her. According to CME FedWatch, the markets don't anticipate another rate hike until February 2017.
  • On the domestic front, President Barack Obama announced plans to nominate a candidate to replace recently deceased judge Antonin Scalia on the Supreme Court in the next few weeks. The challenge will require the president to find a more moderate nominee who would be able to pass a fiery nomination battle in the U.S. Senate, which is controlled by the Republican Party. The nomination has the potential to turn the court liberal for the first time in decades at a time that many critical economic and social cases are before the court. Scalia passed away last week at the age of 79 while on vacation.

Now here's your list of top stocks to watch in today's market, plus today's economic calendar:

Earnings and Stocks to Watch in Today's Market

  • Warren Buffett is calling a bottom in the domestic energy infrastructure industry. According to a fourth-quarter filing, his Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) has built a stake in pipeline operator Kinder Morgan Inc. (NYSE: KMI), which saw shares rise nearly 10% on the news.
  • More good news for the embattled energy sector. Shares of Concho Resources Inc. (NYSE: CXO) are rallying on news the oil and gas producer is going to join the S&P 500 later this week. The firm will replace Plum Creek Timber Co. Inc. (NYSE: PCL), which was recently purchased by Weyerhaeuser Co. (NYSE: WY).
  • Shares of Priceline Group Inc. (Nasdaq: PCLN) surged more than 10% after the company crushed top- and bottom-line earnings expectations.
  • The global hospitality market will get another test after the bell when Marriott International Inc. (Nasdaq: MAR) reports fourth-quarter earnings.
  • Shares of Fossil Group Inc. (Nasdaq: FOSL) are on fire this morning, swelling 14% after the watchmaker beat Wall Street earnings estimates.
  • Stock in T-Mobile US Inc. (Nasdaq: TMUS) rallied 5.1% after beating earnings expectations, yet still issued a weak earnings outlook.

Today's U.S. Economic Calendar (all times EST)

  • MBA Mortgage Applications at 7 a.m.
  • Housing Starts at 8:30 a.m.
  • PPI-FD at 8:30 a.m.
  • Redbook at 8:55 a.m.
  • Industrial Production at 9:15 a.m.
  • Atlanta Fed Business Inflation Expectations at 10 a.m.
  • E-Commerce Retail Sales at 10 a.m.
  • 4-Week Bill Auction at 11:30 a.m.
  • FOMC Minutes at 2 p.m.
  • St. Louis Federal Reserve Bank President James Bullard speaks at 6 p.m.

Despite the recent rally, investors still want to know if we're headed for a stock market crash, correction, or bear market. Here's what our Money Morning experts predict will happen in 2016...

What Investors Must Know This Week

Follow Money Morning on Facebook and Twitter.

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.

Read full bio