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No April Fools' joke: The Dow Jones Industrial Average kicked off the second quarter with a 107-point gain, despite a sharp downturn in global oil prices. The Dow Jones rallied on positive manufacturing data and news that the U.S. economy added more jobs than economists had anticipated.
Here's what you need to know about the markets on Friday, April 1, 2016.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
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Dow Jones: 17,792.75; +107.66; +0.61%
S&P 500: 2,072.78; +13.04; +0.63%
Nasdaq: 4,914.54; +44.69; +0.92%
Now, here's the top stock market news today…
DJIA Today: Saudi Oil Ministers Make Fools of Bullish Oil Investors
Auto stocks were in focus today with the monthly releases of vehicle sales. Shares of Ford Motor Co. (NYSE: F) fell 3% despite an 8% increase in domestic auto sales. Meanwhile, shares of General Motors Co. (NYSE: GM) were off 3.1% after the firm announced that March retail sales increased by nearly 6%. However, rental deliveries fell by a stunning 33%. That latter figure is further evidence of the impact of ride-sharing programs like Lyft and Uber, which reduce the need for car rental services at airports and in metropolitan areas.
S&P Capital projects Q2 2016 to produce the worst set of quarterly earnings reports since 2009. According to Thomson Reuters, S&P 500 earnings are expected to slump by 6.9% in the first quarter, the worst numbers we've seen since the height of the financial crisis. It gets even worse for the energy sector, where the average energy profit figures are set to fall by 99% across the board. As Money Morning Capital Wave Strategist Shah Gilani explains, this rally could be in trouble.
Biotech stocks pushed higher on Friday, with the iShares Nasdaq Biotechnology ETF (Nasdaq: IBB) adding 2.9%.
On the economic front, the U.S. Labor Department reported that the March unemployment rate ticked up slightly to 5% and the economy added 215,000 jobs for the month. Despite the stronger than expected report, it is unlikely to sway the U.S. Federal Reserve's position on monetary policy. Fed Chair Janet Yellen recently cut the number of expected hikes for 2016 from four to two, and the CME FedWatch foresees just a 7% probability of a rate hike in late April.
That said, Cleveland Fed President Loretta Mester turned a few ears when she said more interest rate hikes in 2016 would be "more appropriate" for the U.S. economy based on recent economic data and that the Fed should continue on a path to rate normalization.
But the big talk today was WTI crude oil prices, which slipped 4% to $36.79 and saw a weekly loss of 6%, while Brent crude fell 4.1%. Skepticism continues to rise over a possible deal between OPEC and non-OPEC producers to freeze oil output. Saudi Arabia's top energy leaders said they will not engage in a global production freeze unless Iran takes part. That had some global analysts projecting another sharp downturn in oil prices, perhaps lower than $30 per barrel, according to technical analysts at The ECU Group.
Now, let's look at the day's biggest stock movers and today's must-own stock…
Top Stock Market News Today
- The April Fools' pranksters at Alphabet Inc. (Nasdaq: GOOGL) had to shut down their Gmail "Mic Drop" tool soon after it was unveiled. Angry e-mailers and one writer who lost his job by accident complained about the tool.
- Marriott International Inc. (Nasdaq: MAR) celebrated its bidding war for Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) after Chinese rival Anbang Insurance dropped its $14 billion bid for the firm. The $13.6 billion merger between Marriott and Starwood will create a firm that will operate more than 5,500 hotel properties around the globe. However, both stocks fell due to the news. Shares of MAR were off 5.7%, while HOT stock fell 4.8%.
- Tesla Motors Inc. (Nasdaq: TSLA) had big news for the automotive industry today. The electric vehicle market announced that more than 180,000 customers put down at least $1,000 in deposits to purchase the firm's new Model 3 in the first 24 hours of sales. The vehicle, which starts at $35,000 – less than half what other Tesla vehicles cost – will not start production until late 2017.
- On the earnings front, BlackBerry Ltd. (Nasdaq: BBRY) stock slipped 7.5% after the company lost $0.03 per share for its latest quarter. That decline is still better than what Wall Street expected. However, the big miss was on revenue, which declined 26% year over year.
- Finally, here's your must-own stock of the day. The States of New York and California have now increased the minimum wage to $15 per hour. That's going to have a strong impact on companies who have a lot of low-skill labor. As mountains of data prove, higher income levels do not alleviate poverty. If you want to protect yourself from the impact of this misguided economic policy, be sure to buy stocks like this one that can afford the cost of labor and protect its bottom line.
The Shocking Forecast for Oil Prices in 2016: Crude oil prices plunged in 2015, but our forecast points to a turnaround this year that will send the price of oil higher. Don't miss our full-year target and the key developments that will move oil prices in 2016. Read more…
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.