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When the U.S. Federal Reserve says jump, the markets obey. The Dow Jones Industrial Average had a strong day as Fed Chair Janet Yellen offered another dovish outlook on the U.S. economy and related monetary policy. The S&P 500 was back in the black for 2016 as traders reacted to expectations the central bank will not increase rates in April. It's no wonder that 93% of all movement in the markets over the last eight years is directly correlated to the actions of the Federal Reserve.
Here's what you need to know about the markets on Tuesday, March 29, 2016.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,633.11; +97.72; +0.56%
S&P 500: 2,055.01; +17.96; +0.88%
Nasdaq: 4,846.62; +79.84; +1.68%
Now, here's the top stock market news today…
DJIA Today: Rate Rumors, Iran's Reluctance, and Surging Home Prices
Oil prices fell sharply as domestic crude inventories are poised to hit new record highs and optimism over a possible energy freeze is fleeting. Investors are selling on the recent price rally that has seen crude prices tick up more than 45% since mid-February. OPEC and a handful of major global suppliers are set to meet in Doha, Qatar, on April 17 to discuss a production freeze in order to offer price support to global energy commodities. However, Iran is unlikely to take part in the deal, and that has traders fleeing. Both WTI crude and Brent crude prices fell by 2.8% today.
On the economic front, the Case-Schiller Index showed that average home prices increased by 5.7% in January. Housing prices are ticking up as supply in the market remains tight. That was positive news for the construction sector. Shares of homebuilder Lennar Corp. (NYSE: LEN) added 3.2% after the firm beat Wall Street estimates for both its top and bottom lines. The company said the average home sales price jumped by 12% year over year to $365,000. Meanwhile, it said its backlog is up 13%, while deliveries increased by 12%.
But the big talk today was about Federal Reserve Chair Janet Yellen. The central bank leader offered another "dovish" speech today, suggesting that she expects the U.S. central bank to increase interest rates gradually. Yellen admitted ongoing pressures around the world could weigh on the U.S. economy and did not offer a timetable on when we can expect additional hikes to interest rates. The U.S. economy does not face any pronounced short-term domestic threats; however, Yellen said such an assessment can be affected by "considerable uncertainty." The next FOMC statement is slated for April 27. According to CME Fed Watch, there is a 7% chance that the central bank hikes rates in April.
Now, let's look at the day's biggest stock movers and today's must-own stock…
Top Stock Market News Today
- Shares of Microsoft Corp. (Nasdaq: MSFT) were up 2.2% ahead of its annual Build Conference, which kicks off in San Francisco on Wednesday. The annual event gives the technology giant an opportunity to showcase new milestones and plans for the rest of the year. It also affords Microsoft the chance to court developers who use the company's software to develop new services.
- Yahoo! Inc. (Nasdaq: YHOO) announced that any possible suitors who would like to purchase their assets have until April 11 to offer bids. The firm announced plans to sell its core Internet business and its stakes in Alibaba Group Holding Ltd. (NYSE: BABA) and Yahoo Japan. Last weekend, rumors emerged that Microsoft Corp. (Nasdaq: MSFT) was working with private equity firms to discuss a possible purchase. YHOO stock gained 3.1% today.
- Shares of Facebook Inc. (Nasdaq: FB) jumped 2.2% after the Oculus Rift hit homes yesterday. Here's why the virtual reality set is a game-changer for the global social media giant and just one reason of many that Facebook stock is poised to hit $250 per share by 2020.
- Finally, here's your must-own investment of the day. We're always finding the best stocks to own right now for investors. But every now and then, a new opportunity opens up that investors need to know about in these uncertain times. Today, Money Morning Chief Investment Strategist Keith Fitz-Gerald highlights a "must-own" investment fund that caters to the most important commodity on Earth. You'll be glad to know that this fund exists, and happier from the returns it offers. Read more about it, right here.
Negative Interest Rates Will Kill America's Free Market… Negative interest rates are the latest central bank "flavor of the month," and the fact that this disastrous policy hasn't worked in Europe – or anywhere – won't stop the Federal Reserve from taking NIRP for a spin in the United States. Now's your chance to gain immediate protection from the downside – and even position yourself to profit – when Team Yellen takes rates negative. Don't delay…
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.