It looks like traders are selling on the rallies and buying on weakness. The Dow Jones Industrial Average is poised for a second-straight day of declines after a solid three-day rally kicked off the week. As the weekend approaches, let's jump into what traders are chatting about this morning.
For Feb. 19, 2016, here's your top stock market news, stocks to watch, and economic calendar.
Dow Futures Today
Futures for the Dow Jones today (Friday) forecast a 60-point decline as oil prices slipped and CPI data came in lower than economists had anticipated. Meanwhile, Cleveland Federal Reserve President Loretta Muster said that she expects "gradual" interest rate increases due to a "strong" domestic economy.
Here's a breakdown of why the Dow is higher this morning and what you need to watch later today.
A standoff between one of the world's largest technology companies and the Federal government is dominating headlines. The Federal Bureau of Investigations is demanding that Apple Inc. (Nasdaq: AAPL) turn over its encryption-breaking technology and allow investigators to open the phones recovered at the recent San Bernardino terrorist shootings. Apple is resisting the order and has received support from companies like Facebook Inc. (Nasdaq: FB), Twitter Inc. (Nasdaq: TWTR), and Walt Disney Co. (NYSE: DIS). The company argues that turning over such information would weaken consumer privacy protections.
Oil prices are surging in ways we haven't seen in a long time. Crude prices surged more than 14% earlier this week on news that several members and non-members of OPEC have agreed on freezing production levels. With Iran's endorsement of the deal on Wednesday, prices pushed higher. However, a record increase in U.S. inventory levels fueled price declines yesterday and this morning. Early trading saw WTI prices fall 1.6%, while Brent prices slipped 1.5%.
Look for a rally in oil field services stocks at some point today. Financial services firm D.A. Davidson has initiated coverage of several companies in this space and set "Buy" ratings for Baker Hughes Inc. (NYSE: BHI), Halliburton Co. (NYSE: HAL), Schlumberger Ltd. (NYSE: SLB), and Weatherford InternationalPlc. (NYSE: WFT). The research team said these companies will be able to overcome the low oil price environment and emerge with stronger financial performances.
Yesterday, the Dow fell 40 points. The index was held back by Wal-Mart Stores Inc. (NYSE: WMT), whose shares fell 3.1% after issuing a weaker than expected quarterly profit figure and sales outlook. The firm slashed its sales growth forecast through 2017 to "relatively flat." Its previous estimates said growth would be up to 4%.
Today's trading session will center around the core consumer price index (CPI), which excludes energy and food prices. Last month, the figure increased by 0.2%. This figure is key because it is the U.S. Federal Reserve's preferred metric to measure inflation.
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
Shares of Applied Materials Inc. (Nasdaq: AMAT) surged more than 7% after the semiconductor giant reported stronger profits than anticipated by Wall Street analysts.
Additional earnings reports today include Deere & Co. (NYSE: DE), which beat Wall Street expectations by $0.10 but saw shares fall 2.4%. Shares of VF Corp. (NYSE: VFC) slipped more than 8.5% after top- and bottom-line earnings figures fell far short of forecasts.
Shares of Best Buy Co. (NYSE: BBY) are facing a long day of pressure after Goldman Sachs Group Inc. (NYSE: GS) downgraded the stock from "Buy" to "Neutral." The investment bank said that weakness in wireless sales will offset strength in television sales. Speaking of Goldman Sachs, the bank thinks it has spotted an economic anomaly - and they're warning it may force the firm to redefine the nature of capitalism itself. Read all about it, right here.
Shares of Facebook Inc. (Nasdaq: FB) are trading at a huge discount, and investors should be filling their IRAs with this stock as tax time approaches. This company has been pulled down by a broader market sell-off centered on weak Chinese data and slumping oil prices. But this digital darling just keeps reporting better than expected numbers quarter after quarter. Thing is, we haven't seen anything yet as its profit numbers are poised to explode. You'll want to read all about FB stock right here as its pipeline of products are poised to reap investors huge gains in the near future.
Cleveland Federal Reserve Bank President Loretta Mester speaks at 8 a.m.
Consumer Price Index at 8:30 a.m.
Baker Hughes Rig Count at 1 p.m.
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...
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.