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Tuesday's Dow Jones Industrial Average session is off to a hot start on what is going to be a wild day of politics and market speculation. Starting off, the People's Bank of China is at it again. The world's greatest money manipulator announced plans to slash its reserve requirement ratio for the fifth time over the last year. This will reduce the amount of money that banks are forced to hold as reserves and permits the increase of leverage in an economy. When has that ever gone wrong?
With the markets in motion, let's tackle your top Dow Jones news, stocks to watch, and economic calendar for March 1, 2016. Historically, the month of March is a strong month of stocks.
Dow Futures Today
Futures for the Dow Jones today forecast a 117-point gain for the first day of March. Investors appear more optimistic that the Fed Open Market Committee will not hike rates this month, as broader macroeconomic concerns in other regions like Asia and Europe weigh on U.S. companies.
Here's a breakdown of why the Dow is pushing higher this morning.
- Today is Super Tuesday, a day when 13 states and one U.S. territory participate in primary elections. Democratic front-runner Hillary Clinton and GOP front-runner Donald Trump are widely expected to win a large number of states today, setting up what will likely be one of the most vitriolic U.S. elections in American history. Congratulations, America. Just eight more months of this!
- This morning will continue to focus on earnings reports and economic data. Pay close attention to the February update from the Institute for Supply Management on domestic manufacturing. Economists anticipate bad news – that the national manufacturing index hit 48.5. Meanwhile, U.S. auto manufacturers are set to report February sales of car and light truck sales, while the U.S. Commerce Department reports December construction spending.
- Finally! Some wage growth! After seven years, one of the most important measurements in the U.S. economy has returned to pre-recession levels. According to Sentier Research, median income (adjusted for inflation) for the typical American family was $57,153 in December. That is 4.3% higher than last year and about 1% higher than December 2007. Expect the president to do a victory lap, because that's what he does.
- Finally! Some honesty! In a speech, New York Federal Reserve President William Dudley admitted that he has some concerns about downside risks when he crafted his U.S. economic outlook. Should that sentiment spread to his cohort, it is very unlikely that the U.S. Federal Reserve will hike interest rates this month.
- Blame Leap Day! Yesterday, the Dow saw a sharp sell-off in the final hour of trading, erasing any gains the markets had squeezed out during the month of February. Healthcare stocks sold off at the onset of the week, fueling broad losses across the markets. Today, our Defense and Tech Specialist explains how the market's retreat has produced several great bargains in the biotech sector. It's a perfect time for bargain hunters to find real value in this beaten up market. Check out these stocks, right here.
- Oil prices were on the rise this morning thanks to ongoing optimism about Saudi Arabia's production deal and expectations that China will ease monetary policy yet again.
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
- On the earnings side, discount retailer Dollar Tree Inc. (Nasdaq: DLTR) fell short of Wall Street expectations, blaming a "challenging" macroeconomic environment. DLTR shares were down 4%. Meanwhile, shares of Medtronic Plc. (NYSE: MDT) were flat this morning after the firm reported earnings in line with expectations. Also look for reports from AutoZone Inc. (NYSE: AZO) and Dick's Sporting Goods Inc. (NYSE: DKS).
- Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) are back in focus today after falling more than 18% on Monday. The firm delayed its fourth-quarter earnings report and announced that its currently under investigation by the U.S. Securities and Exchange Commission. So, what do you think is going to happen to this company? Write your thoughts in the comment section below.
- The turnaround of Barclays Plc. (NYSE: BCS) isn't going so well. Shares of BCS are off 7.5% after the 320-year-old lender announced a dismal earnings report, the first since new CEO Jes Staley was hired. Like every other European banking institution, Barclays is under threat because of geopolitical woes in the region. It has been slashing costs to bolster its balance sheet. The firm is halfway through a three-year effort to slash costs and eliminate 19,000 jobs. It also announced plans to split itself into two companies.
- Yesterday, shares of Sysco Corp. (NYSE: SYY) gained more than 2% on news that the food distributor plans to cut 1,200 jobs and reduce costs associated with a technology overhaul.
Today's U.S. Economic Calendar (all times EST)
- Redbook at 8:55 a.m.
- PMI Manufacturing Index at 9:45 a.m.
- ISM Manufacturing Index at 10 a.m.
- Construction Spending at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- 52-Week Bill Auction at 11:30 a.m.
- Gallup US ECI at 2 pm.
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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.