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As we predicted this morning, a strong durable goods order report offset concerns about the U.S. economy and sluggish oil prices. Markets rallied as manufacturing data signaled renewed confidence that production of durable goods is shaking off a weak December-ending quarter. How long can the rally hold for? That's what we're going to find out tomorrow (Friday) when the U.S. Commerce Department reports its second revision of GDP for the fourth quarter.
So let's get started on what happened in the markets on Feb. 25, 2016.
First up, check out the results for the Dow Jones Industrial Average, S&P 500, and Nasdaq:
Dow Jones: 16,697.29; +212.30; +1.29%
S&P 500: 1,951.70; +21.90; +1.14%
Nasdaq: 4,582.21; +39.60; +0.87%
Now, here's the top stock market news today…
DJIA Today: Buffett Under Pressure, Fed Follies, and Energy Rallies
Another China stock market crash happened earlier today (Thursday) as worries about market liquidity in the nation intensified. For U.S. investors, the China stock market crash hits close to home because every major sell-off in China will have a massive impact on global stocks in 2016.
Oil prices were on the rise today, with Brent crude jumping 2.6% to $35.29. Traders appeared optimistic about news that global oil producers plan to meet in March to discuss a proposed production freeze. However, as Money Morning Global Energy Specialist Dr. Kent Moors explains, markets and commentators seem to be missing the fact that what is happening with falling oil prices over the last year isn't an oil supply problem. It's a supply expectation problem. This is the energy elephant in the room that no one is talking about and you need to know moving forward.
But the big talk this afternoon centered on the U.S. Federal Reserve and global markets. All hands are on deck at the Fed to assure investors the U.S. economy is growing stronger and that 2016 will not feature a recession. This afternoon, San Francisco Fed President John Williams praised the health of the economy despite the stock market's volatility over the last two months.
However, what stood out from Williams' speech today was a statement that falling oil prices were not a threat to the financial sector, which is already off more than 12% so far this year. He must not be paying attention after several prominent banks – including JPMorgan Chase & Co. (NYSE: JPM) – announced they will need to raise reserves to offset their exposure to the sector. Williams may also be ignoring a perfect storm of oil prices, exposure to a flailing European banking sector, rising debts, negative interest rates, and sluggish economic growth in China. He remains confident the Fed will continue to raise interest rates this year…
Speaking of which, how about that interest rate hike, huh? Mortgage rates slumped to their lowest levels since February 2015, according to mortgage giant Freddie Mac. A 30-year fixed-rate mortgage averaged 3.62% this week, down from 3.65% a week ago.
Now, let's look at the day's biggest stock movers and Thursday's stock picks…
Top Stock Market News Today
- President Obama's call for increased gun control only created a surge in demand for firearms after the FBI reported a record number of background checks for the month of December. Now the December-ending earnings report is in for Sturm, Ruger & Co. (NYSE: RGR), and wow were they profitable. Shares hit a new intraday all-time high today at $70 each and finished up 7.7% on the day. Rival Smith & Wesson Holding Corp. (Nasdaq: SWHC) added nearly 3.6% on the news.
- Next, what does Warren Buffett think of the market? We're about to find out as the legendary investor plans to release his annual letter to shareholders of Berkshire Hathaway Inc. (NYSE: A, BRK.B) on Saturday. Make no mistake, this will be one of the most widely anticipated investor letters in the 50 years that Buffett has run the company. The letter comes after a year of its largest stock underperformance compared to the broader market since 2009.
- Luxury markets are starting to look a little shaky on news that Restoration Hardware Holdings Inc. (NYSE: RH) announced it will likely miss fourth-quarter earnings expectations. RH stock fell 25.9% on the day.
- Finally, here's not only your stock pick of the day – this is your stock pick of the week! Shares of Alphabet Inc. (Nasdaq: GOOGL) added 1.1% and pushed the Nasdaq higher. Now, you probably know the firm as the parent company of Google, and it just surpassed Apple Inc. (Nasdaq: AAPL) as the world's most valuable company by market capitalization. But what you might not know is why this stock has an easy upside of 50% in the near future. Find out why GOOGL stock is a screaming buy right now, or get left out when shares surge past $1,000 apiece.
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.