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Dow Jones Industrial Average News, 4/6/2016: The U.S. Federal Reserve continues to push back its timing for the next interest rate hike as concerns about the global economy weigh on the central bank's expectations. That rate hike delay is actually fueling a rally. But unsupported by fundamentals, what we've seen in recent weeks is actually a "bear market rally." Unfortunately, this rally is doomed, and the bear market is about to come out of hibernation.
Here's what you need to know about the markets on Wednesday, April 6, 2016.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,716.05; +112.73; +0.64%
S&P 500: 2,066.66; +21.49; +1.05%
Nasdaq: 4,920.72; +76.78; +1.59%
Now, here's the top stock market news today...
DJIA Today: Inversion Deals in Jeopardy, Clueless Federal Reserve
WTI crude oil prices today scored their biggest one-day jump since March 16 after Kuwait's OPEC governor renewed hopes that global producers will freeze output at the meeting later this month. The boost is also due to the U.S. Energy Information Administration announcing that U.S. crude inventories slipped more than 4.9 million barrels last week. That's a sharp contrast from the 2.3-million-barrel decline that economists anticipated. That said, the nation saw an unexpected inventory build in gasoline and distillates.
On the economic front, look out for speeches this evening from Federal Reserve members James Bullard and Rob Kaplan. This morning, the U.S. Gallup Job Creation Index increased to a rating of 32, its highest level in the eight-year history of the index. The index data indicated a sharp rise in nongovernment workers.
But the big talk today was the release of minutes from the Federal Reserve's March meeting, where central bankers discussed the possibility of an interest rate hike. According to the minutes, Janet Yellen and her band of central bankers debated a possible rate hike in April; however, a consensus emerged stating that too many global economic risks justified a more cautious approach to monetary policy. Traders' attention now turns to the policy meeting set for April 26-27. According to CME Group in Chicago, there is very little chance of a rate hike this month. CME FedWatch sets a 3% probability of a rate increase.
Now, let's look at the day's biggest stock movers and today's best investment idea...
Top Stock Market News Today
- The deal is dead. Pfizer Inc. (NYSE: PFE) announced it's walking away from a planned $160 billion merger with Allergan Plc. (NYSE: AGN). Both stocks were up today as traders speculated that both companies will now look to smaller rivals for the purposes of acquisitions. Pfizer walked away from the deal after the U.S. Treasury Department introduced a number of new rules to prevent American companies from engaging in inversion deals in order to dodge the government tax code. As part of the breakup, Pfizer will be forced to pay a deal termination fee of $150 million to Allergan.
- But this deal survived... Shares of Baxalta Inc. (NYSE: BXLT) rallied 5.6% on news that Shire Plc. (Nasdaq ADR: SHPG) said it anticipates that the planned merger between the two firms will still close. The deal is under pressure as the U.S. government attempts to disrupt efforts by U.S. firms to engage in tax inversion deals.
- Commodity giant Glencore Plc. (LON: GLEN) announced plans to sell roughly 40% of its agricultural division to Canada's state pension fund. The $2.5 billion deal is part of a broader effort by Glencore to reduce its debt levels as commodity prices remain frustratingly low. Shares of GLEN were off 1.2% on the London Stock Exchange.
- Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) rallied 18.8%, putting the Canadian drug company on track for its best two-day rally in two decades. The rally came after bullish statements by activist investor Bill Ackman. While Ackman's fund may be up roughly $250 million on its position in the last two days, his position is still off billions from its slide from its 52-week high. Here's what to expect next for VRX stock.
- Finally, here is your investment idea of the day from Money Morning Chief Investment Strategist Keith Fitz-Gerald. Right now is a perfect time to attack an overinflated, overvalued company. As Keith explains, "the potential could be even bigger because [this company] is out of touch with the technological changes that threaten its existence." Here is the name of a gaming company that could easily become your most profitable shorting opportunity in 2016.
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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.