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It was a battle between the Apple stock bulls and the oil bears for who could swing the markets higher or lower today (Wednesday). As we've warned for months, investors are finally waking up to the fact that many banks are highly vulnerable to the swelling debts of energy companies in a low price environment. There are many stories we have warned about and profitable stock plays that some were left out on owning. But that's why we lay out the top stories each day…
So let's get started on what happened today, Feb. 24, 2016.
First up, check out the big gains for the Dow Jones Industrial Average, S&P 500, and Nasdaq today:
Then read today's top stock market news today…
First up, it appears that if we're going to get any value in the market, it's not coming from organic growth anytime soon. Companies are relying on mergers and acquisitions, stock buybacks, and dividend hikes in order to boost shareholder value. This is all coming under pressure from activist investors, including private equity firms and hedge funds.
Today's deal news centers on Yahoo! Inc. (Nasdaq: YHOO). Shares are on the move after a major shareholder, Canyon Capital, is pushing the firm to move quickly and sell its core Internet business. The private equity firm joins activist Starboard Value in pushing the firm to sell. On Tuesday, Reuters reported that Time Inc. (NYSE: TIME) is considering a deal with the firm, along with Verizon Communications Inc. (NYSE: VZ).
Oil prices were on the rise today, with Brent crude jumping 3.4%. Prices have been seesawing over the last 24 hours due to concerns about record crude inventory levels. According to the Energy Information Administration, U.S. crude levels jumped by 3.5 million barrels last week to put inventory at an all-time high of 507 million barrels.
Next, need more evidence that currencies around the world are in crisis mode? We've got you covered. This morning, the UK pound fell to its lowest level against the U.S. dollar in seven years, and economists don't anticipate a reversal from this downturn any time soon. Yesterday, the pound fell below $1.40 for the first time since 2009. So what's fueling this decline? Right now, the nation is having a broad debate about whether it should depart the European Union, an event widely known as the "Brexit." The country will first have a referendum vote in June to consider changes to the nation's membership terms.
The International Monetary Fund warned that Britain's referendum could destabilize the nation's economic recovery. The IMF also warned it might slash its global growth forecast unless countries reach an accord to boost government spending in the near future. Once a Keynesian, always a Keynesian, even if spending more taxpayer money and increasing government debt over and over should be in the dictionary as the definition of insanity.
Now, let's look at the day's biggest stock movers and Wednesday's stock picks…
Top Stock Market News Today
- Another bad day for financial stocks came due to rising concerns about bank exposure to shaky energy debts. Shares of Wells Fargo & Co. (NYSE: WFC) and Citigroup Inc. (NYSE: C) fell on the day.
- Pressure is especially strong against JPM stock – which is down 15% this year – after CEO Jamie Dimon announced that a prolonged oil price of roughly $25 per barrel through 2017 would force the company to boost its reserves by at least $1.5 billion. Meanwhile, Wells Fargo said it plans to set aside $1.2 billion to handle potential losses in the sector.
- The auto sector is under pressure after investment firm Credit Suisse Group AG (NYSE ADR: CS) warned it's a "poor time" to own motor stocks. Shares of Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) were both off more than 1.8% after the warning.
- Embattled energy giant Chesapeake Energy Corp. (NYSE: CHK) finally had a stock rally despite reporting a fourth-quarter earnings loss of $3.36 per share. The firm also announced during its earnings report it plans to slash its production levels by as much as 5% this year.
- Finally, here are your stock picks for Wednesday. Today, we're talking about the life sciences sector, which has been under pressure since presidential candidate Hillary Clinton promised to unleash price controls on biotech manufacturers. Despite the recent slump, this sector – which includes biotech stocks – offers investors some of the best long-term opportunities for building wealth. And that means you definitely want biotech stocks in your portfolio, especially now. The market is already bouncing back. And Money Morning Defense & Tech Specialist Michael A. Robinson has three plays he's going to tell you about that are poised to hand investors 69% gains on average.
What Investors Must Know This Week
- The $600 Million Signal That Oil Prices Are About to Rise
- How to Prepare for a Global Recession in 2016
- This Easy Investing Strategy Can Lead to 2,426% Profits
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.