Traders are waking up to concerns about this week's round of earnings reports from some of the nation's biggest banks. Some banks are anticipating their worst quarterly reports in roughly ten years.
A sharp decline in fees from mergers and acquisitions, energy debt, and a decline in trading activity are just a few reasons why the sector is faltering.
Banks reporting this week include JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), and Citigroup Inc. (NYSE: C).
Here's today's top stock market news, stocks to watch, ways to profit, and economic calendar for April 11, 2016.
What's Moving the Dow Jones Industrial Average Today: Earnings Season Kicks Off
Dow Jones futures were ticking down slightly this morning as traders eyed an especially busy week of earnings reports. Today "officially" kicks off earnings season with a quarterly report from Alcoa Inc. (NYSE: AA). The global alumina producer is viewed as a proxy for global growth in the previous quarter, and thus a reflection of earnings potential.
Here's a breakdown of why the Dow is flat this morning.
First up, it was a good run, Puerto Rico. The U.S. commonwealth's fiscal emergency hit a new shade of red on news that its governor declared a state of emergency at the Government Development Bank. The announcement is aimed to ensure that its citizens still receive essential government services. This is what happens when a small island with the population of the size of Connecticut finds a way to fall more than $72 billion into debt and everyone ignores warning signs about a fiscal collapse. Of course, if you were paying attention to Money Morning Global Credit Strategist Michael Lewitt, the commonwealth was doomed years ago.
The World Bank announced that it projects that weakening economic growth in China will reduce activity in the broader economy in East Asia and the Pacific region.
WTI crude oil prices were ticking higher as traders covered short positions. Traders also expected higher prices on news that U.S. crude inventories and the domestic rig count fell last week. Global Brent crude prices also received a bump on news that Russia's production output slipped in April as OPEC and leading non-OPEC producers prepare to meet next week in Doha, Qatar, to discuss a potential freeze in oil output.
On the economic front, President Barack Obama will meet Monday with U.S. Federal Reserve Chair Janet Yellen to discuss economic and regulatory issues. Translation: "Ms. Yellen, what can you do to make the bottom not fall out during my last year of office after seven years of uncharted monetary policy?" Yellen is attempting to navigate the normalization of interest rates as concerns about the global economy weigh on investor sentiment. The meeting takes part during a very light economic calendar.
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
On the "same old story" alert, U.S. banking giant Wells Fargo & Co. (NYSE: WFC) had admitted that it fooled the federal government into insuring a large sum of risky mortgages - meaning they really deceived the American taxpayer into backing these bad mortgage agreements. The company will pay a record $1.2 billion settlement with the U.S. Department of Justice. After that, Wells Fargo will go right back to business, and no individual person or group of persons - you know, the people who got together and did the deception - will likely face charges or repercussions.
Shares of Facebook Inc. (Nasdaq: FB) are in focus as the company plans to kick off its annual F8 conference on Tuesday morning. The company's CEO Mark Zuckerberg is set to deliver the conference's keynote address.
The record hotel deal is through the second hurtle. Shareholders of Starwood Hotels & Resorts Inc. (NYSE: HOT) and Marriott International Inc. (NYSE: MAR) both approved the $12.4 billion merger to create the world's largest hotel chain.
According to reports, Yahoo! Inc. (Nasdaq: YHOO) has extended its deadline for bids for its assets by another week. The new date is April 18. The company is auctioning away its core Internet business, after ditching plans to spin off its massive stake in Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA). Rumors emerged over the weekend that the United Kingdom's Daily Mail is considering a Yahoo bid backed by a private-equity firm.
Today's U.S. Economic Calendar (all times EDT)
4-Week Bill Announcement at 11 a.m.
3-Month Bill Auction at 11:30 a.m.
6-Month Bill Auction at 11:30 a.m.
Dallas Federal Reserve Bank President Rob Kaplan speaks at 1 p.m.
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Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.