What gave the Dow Jones Industrial Average its best one-day gain in a month today? Oil, oil... and more oil. With a global deal likely in place to freeze production, traders are turning their attention to earnings reports for the March-ending quarter. Despite concerns that the first quarter could be the worst for earnings in years, investors are growing more optimistic that a surge in oil prices could rally the markets and provide buying opportunities for firms exposed to depressed prices over the last year.
Here's what else you need to know about the markets on Tuesday, April 12, 2016.
Don't make this popular mistake: Wall Street has soured on automakers. But it's missing an incredible opportunity with this carmaker. This company's pre-emptive strategy could mean a 41% surge in its stock...
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
S&P 500: 2,061.72; +19.73; +0.97%
Nasdaq: 4,872.09; +38.69; +0.80%
Now, here's the top stock market news today...
WTI crude oil prices hit a 2016 high, rallying 4.5% to $42.17, on news Russia and Saudi Arabia have agreed to freeze output levels ahead of next week's meeting among global producers in Doha, Qatar. This announcement is critical because it indicates that any deal including additional producers will not be contingent on whether Iran decides to join the accord. In recent weeks, Iran's oil minister has said the country will not participate in a freeze as it brings oil back to the market after years of being frozen out by global economic sanctions. Brent gained 4.3% to $44.69 on the day. Here's what to expect for oil prices moving forward in 2016.
Oil also received a boost after John Watson, chairman and CEO of Chevron Corp. (NYSE: CVX), said in an interview with CNBC that oil markets will balance out in the coming months. Watson expects cuts to capital investment will lead to a decline in global supply, bringing the market to equilibrium. Shares of CVX stock were up 2.4% on the day.
The International Monetary Fund argued in a report released today that an exit by the United Kingdom (Brexit) from the European Union could destabilize global markets. The global financial agency is concerned companies will not be able to quickly transition to the new economies and reality of business in Europe.
The statement came after the IMF slashed its global growth forecast for the fourth time in 12 months. It now projects a global growth rate of 3.2% for 2016. Analysts anticipate that a Brexit could significantly affect global confidence. The IMF also raised concerns about the economies of China, Japan, Brazil, and the European Union. However, keep in mind we are going to use such events to find new opportunities to buy into the markets in the long term, regardless of whether the United Kingdom exits or not.
But the big news today was the performance of financial stocks. With major banks reporting earnings this week, traders set aside concerns about a downturn in the sector and pushed the stocks higher. The SPDR S&P Bank ETF (NYSE Arca: KBE) rallied 2.1% today. Tomorrow, JPMorgan Chase & Co. (NYSE: JPM) kicks off the bank earnings party by reporting its fiscal first-quarter report.
Now, let's look at the day's biggest stock movers and today's must-own stock...
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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, 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.