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Dow Jones Industrial Average, 3/14/2016: The banking bears were out in full force today (Monday) after chatter about global recessions and financial doom popped up across the media landscape. Morgan Stanley (NYSE: MS) projected a 30% potential for a worldwide recession, while Citigroup Inc. (NYSE: C) said the global economy is in a death spiral. Morgan Stanley slashed its global growth forecast down to 3% and said the U.S. economy will grow at an anemic 1.7%.
Why was Citigroup so bearish? Here's a direct quote from a report from its strategists:
"Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a 'significant and synchronized' global recession and a proper modern-day equity bear market."
That was uplifting, wasn't it? While you're attempting to cheer up, here's what you might have missed in the markets for Monday, March 14, 2016.
Check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,229.13; +15.82; +0.09%
S&P 500: 2,019.64; -2.55; -0.13%
Nasdaq: 4,750.28; +1.81; +0.04%
Now, here's the top stock market news today…
DJIA Today: Oil Slumps, Pot Cures Children, and the Fed's Bubble Pattern
First up, the Dow Jones Industrial Average added 15 points as consumer discretionary stocks rallied and offset a sharp downturn in oil prices. Discretionary stocks rose after a big deal in the hotel industry rocked markets, and a series of upgrades boosted key movers in the sector. Traders were mostly treading water ahead of tomorrow's Fed Open Market Committee meeting. Though the central bank is not expected to hike rates in March, CME Fed Watch projects a 50% chance of another hike in June. Wednesday's post-meeting conference will likely offer some clarity into the Fed's current sentiment on the U.S. economy and any concerns about negative-interest-rate policy in Europe, Switzerland, and Japan.
Oil prices cratered again today after Iran threw a wrench into plans for a global production freeze. The nation said it will not join OPEC's crusade to freeze output levels until it is able to push its current production levels up to 4 million barrels per day. WTI prices slipped 3.4% to $37.18 a barrel, while Brent crude prices fell 2.1% to $39.53.
Now, this is a completely different type of pot stock to consider. Shares of GW Pharmaceuticals Plc. (Nasdaq ADR: GWPH) rallied more than 130% after the company announced that experimental cannabis-based treatment has been successful in treating children with a rare form of epilepsy.
But here's the story that deserves the most attention today. According to a new report by the founder of ValueBridge Advisors and Fed Dashboard, the Dow Jones' rise over the last eight years is overwhelmingly owed to one group of people: the Federal Reserve. ValueBridge's analysis shows the Federal Reserve's loose monetary policy since 2008 is responsible for a staggering 93% of the Dow's gains. The author found that between World War II and the late-1970s, any gains were 90% tied to future GDP growth. But debt and monetary policy quickly replaced the fundamentals… and spurred a series of noticeable bubbles over recent decades.
Now, let's look at the day's biggest stock movers and an investment strategy that can gain you 190% in just a few minutes a day…
Top Stock Market News Today
- It was a big day for shares of Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT), which jumped 7.8% after receiving a takeover bid from China's Anbang Insurance Group. The offer could lead Starwood's $12.2 billion deal with Marriott International Inc. (Nasdaq: MAR) to fall through in the future.
- Tesla Motors Inc. (Nasdaq: TSLA) received an upgrade from investment group Baird, which raised its per-share price expectations from $230 to $300. Baird said it expects the firm's Model 3 to be a big seller and boost the stock price.
- On the earnings side, shares of 3D Systems Corp. (NYSE: DDD) rallied 24.6% after the company beat both the top- and bottom-line expectations. The firm said its revenue hit $183.4 million, besting consensus expectations of $166 million.
- The Goldman Sachs Group Inc. (NYSE: GS) announced it will purchase retirement tech startup Honest Dollar for an undisclosed amount. The tech firm aims to cater the roughly 45 million Americans who lack access to employer-sponsored retirement plans. It won the 2015 ReleaseIt award at the 2015 SXSW competition.
- Finally, here is a can't-miss investment strategy. With the markets swinging up and down wildly over the last few months, investors are looking for ways to protect their profits and score big gains. But real success as an investor requires you to remove emotion from the equation. And using this three-part strategy, you can allocate your money responsibly to maximize your long-term financial wealth. Learn about it here.
What Investors Must Know This Week
- These Four Charts Have Every Wall Street Pro Worried
- Grab Double-Digit Gains with This Tech Overachiever
- The One "Investment" You Can't Afford to Be Without
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.