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Another day, another energy slump. While you were sleeping, Asian markets fell again thanks to Saudi Arabia admitting the idea of oil production cuts in the future are pretty much a complete lie. With Wednesday off to another brutal start, let's tackle your top stock market news, stocks to watch, and economic calendar for Feb. 24, 2016.
Dow Futures Today
Dow Jones Industrial Average futures forecast a 135-point decline as oil prices slumped again and traders raised renewed concerns about the health of the global economy. Asian markets and European markets dragged again thanks to falling trade data.
Here's a breakdown of why the Dow Jones is slumping and what you need to watch later today.
- First up, the GOP Nevada primary turned into a circular firing squad as candidates came out aiming at one another's character and positions. Front-runner Donald Trump emerged as the winner with 46% of the counted vote, while Marco Rubio finished second with roughly half that turnout. This is Trump's third consecutive state win, and NBC stated the race experienced a record turnout. Meanwhile, in the Democratic primary, longtime Hillary Clinton mudslinger David Brock has encouraged her top competition – Bernie Sanders – to tone down his criticism of her for the good of the political party.
- Energy traders are starting to learn it's best to trade during price rallies so far in 2016. WTI crude oil prices fell again today as traders sold on a rally due to renewed concerns about a glut of oil on the global market and increasing stockpiles. WTI crude prices were off roughly 3%, while Brent crude slipped 1.9%.
- The U.S. Federal Reserve still has its head in the sand. Yesterday, Vice Chairman Stanley Fischer said the ongoing market sell-off may not hurt the U.S. economy. Stanley is optimistic, we'll give him that: "We have seen similar periods of volatility in recent years – including the second half of 2011 – that have left little visible imprint on the economy, and it is still too early to judge the ramifications of the increased market volatility of the first seven weeks of 2016," he said on Tuesday evening.
- Today's trading session will center on new home sales and domestic oil inventory levels. Expect oil prices to face even greater pressure if the U.S. Energy Information Administration announces higher than expected U.S. crude inventory levels. Finally, investors will be listening to speeches from three members of the Federal Reserve for clues about the central bank's upcoming March meeting and its plan for interest rates in 2016.
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 Yahoo! Inc. (Nasdaq: YHOO) are back in focus today after rumors that Time Inc.(NYSE: TIME) has been exploring a deal for the core Internet business of Yahoo. In addition, Verizon Communications Inc. (NYSE: VZ) is considering a deal as well. Given the company's ongoing struggles, it would probably be a bad deal by Time. That said, they are notoriously forever linked to its former parent company's merger with AOL Inc. (NYSE: AOL), long considered one of the worst mergers in corporate history. Ironically, Verizon recently purchased AOL.
- On the earnings front, look out for earnings reports from Salesforce.com Inc. (NYSE: CRM) and HP Inc. (NYSE: HPQ) after the bell. The most important reports before the bell today came from Target Corp. (NYSE: TGT) and Lowe's Companies Inc. (NYSE: LOW), the latter of which saw shares fall 3.5% despite a stronger than expected report and strong 2016 forecast. The news is surprising given that rival Home Depot Inc. (NYSE: HD) crushed earnings expectations thanks to a stronger housing market, improved credit conditions, and rising American wages.
- Shares of Apple Inc. (Nasdaq: AAPL) remain in focus as the company continues to fight a public battle against the FBI over whether it should be forced to unlock the phone of one of the San Bernardino shooters.
- The largest American bank by assets, JPMorgan Chase & Co. (NYSE: JPM), is under pressure due to exposure to failing energy loans. The firm's stock fell more than 4% Tuesday after announcing plans to hike its expectations of losses by $500 million. The broader S&P financial sector has been the worst performing major S&P 500 sector since the onset of 2016, falling more than 12.5%. Bank stocks are cratering due to increased volatility, rising global debts, and exposure to struggling oil and gas company debt.
- Global conglomerate Johnson & Johnson (NYSE: JNJ) is under significant pressure as the company faces a major publicity crisis. Yesterday, a jury in Missouri has ordered the firm to pay $72 million in damages to the family of a woman who died from ovarian cancer. According to evidence in the trial, the victim's decades-long used of talc-based Baby Powder and Shower to Shower products are linked to her death.
Today's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- Richmond Federal Reserve Bank President Jeffrey Lacker speaks at 8 a.m.
- PMI Services Flash at 9:45 a.m.
- New Home Sales at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 2-Year FRN Note Auction at 11:30 a.m.
- 5-Year Note Auction at 1 p.m.
- Dallas Federal Reserve Bank President Rob Kaplan speaks at 1:15 p.m.
- Louis Federal Reserve Bank President James Bullard speaks at 6:30 p.m.
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.