The Dow Jones Industrial Average is back in the green for 2016 as the U.S. economy continues to show positive signs at the same time that central banks around the world are dumping stimulus onto global markets. So what are investors doing now that they made their money back?
As if they're at the Blackjack table for the first time, they're pushing their money into riskier assets and making bigger bets that the last two months were an aberration.
That's a problem, because in a world turning to negative interest rates in order to spur economic growth, bad monetary policy could lead to disaster. Here's why.
And here's the top stock market news, stocks to watch, and economic calendar for March 18, 2016.
What's Moving the Dow Jones Industrial Average Today: Chinese Stocks
Dow futures forecast a 45-point gain as traders cheered rising oil prices and awaited insight from several voting members of the U.S. Federal Reserve.
This morning, Asian markets rallied back into positive territory for the year, with the Shanghai Composite Index gaining 1.7% overnight.
Yesterday, the Dow surged 155 points, while the dollar hit an eight-month low after the Fed decided to stand pat on monetary policy.
Here's a breakdown of why the Dow is in motion this morning.
- Investors are looking for some clarity from the Fed after the confusing post-FOMC conference delivered by central bank Chair Janet Yellen on Wednesday. Pay attention to speeches from New York Fed President William Dudley, Boston Fed President Eric Rosengren, and St. Louis Fed chief James Bullard, who will speak various times throughout the day.
- It's gone from bad to worse for activist hedge fund manager Bill Ackman. Ackman has lost billions on paper from his investment in struggling Canadian drug maker Valeant Pharmaceuticals International Inc. (NYSE: VRX). Now, Standard & Poor's Ratings Services says that it's going to put Ackman's hedge fund Pershing Square Holdings on review for a possible downgrade from its "BBB" credit rating. Right now, Valeant investors like Ackman who were on the "wrong" side of this stock are in a world of hurt. They may never recover. But we're already looking at the next big short opportunities, right here.
- WTI oil prices were back above $41 per barrel ahead of today's Baker Hughes Inc. (NYSE: BHI) rig count. Expectations of a production freeze by 15 nations comprising 73% of global oil supply has traders optimistic that prices will steadily rise. However, crude inventories in the United States jumped to another record high of 523.2 million barrels, while Russia's central bank announced today that it does not believe the four-week rise in oil prices to be sustainable. Russia says the markets are still concerned about oversupply and that China's economic cool down is still a worry on the demand side of the global equation.
Now here's your list of top stocks to watch in today's market, plus today's economic calendar:
Companies to Watch in the Stock Market Today
- Another day, another merger. This time TransCanada Corp. (NYSE: TRP), the firm that was originally going to build and operate the Keystone Pipeline, announced plans to acquire midstream firm Columbia Pipeline Group Inc. (NYSE: CPGX). The deal is worth roughly $10 billion and is part of TransCanada's goal to expand into the United States. Columbia owns and operates about 15,000 miles of natural gas pipeline that run from New York to the Gulf Coast. Shares of CPGX popped 6.6% on the news.
- Shares of Tiffany & Co. (NYSE: TIF) reported quarterly earnings per share (EPS) of $1.46, beating Wall Street expectations by $0.06. The luxury jewelry company also reported better than expected bottom-line revenue and projected increasing sales during the second half of 2016. Despite the positive report, shares fell 1.6% in pre-market hours.
- Adobe Systems Inc. (Nasdaq: ADBE) hiked its annual profit outlook and revenue forecasts higher than Wall Street anticipated. That pushed shares of the Photoshop developer up nearly 6% this morning.
- Additionally, on the earnings side, pay attention to quarterly performance reports from Global-Tech Advanced Innovations Inc. (NYSE: GAI) and Gordmans Stores Inc. (Nasdaq: GMAN).
- Finally, embattled teen retailer firm Aeropostale Inc. (NYSE: ARO) announced intentions to explore a possible sale or firm restructuring. The retail firm reported dismal earnings and forecasts far lower than Wall Street expectations. Same-store sales were off 6.7% for the most recent quarter. The stock was off 46% before the bell today.
Today's U.S. Economic Calendar (all times EDT)
- New York Fed Bank President William Dudley speaks at 9 a.m.
- Consumer Sentiment at 10 a.m.
- Atlanta Fed Business Inflation Expectations at 10 a.m.
- Boston Fed Bank President Eric Rosengren speaks at 11 a.m.
- Baker Hughes Rig Count at 1 p.m.
- Louis Fed James Bullard speaks at 3 p.m.
What Investors Must Know This Week
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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.