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Dow Jones Industrial Average News, 5/2/2016: Sell in May and go away? That's what investors will be discussing as the month kicks off.
Concerns are accelerating about global growth on news that Chinese economic data fell short of economists' expectations. The nation's decision to taper stimulus efforts has pushed the country in to what could easily be described as a "liquidity trap."
Central banking leaders, however, refuse to acknowledge that doing the same thing over and over again – cutting interest rates, boosting stimulus efforts, dropping money from helicopters – doesn't create sustainable growth.
Here's today's top stock market news, stocks to watch, ways to profit and economic calendar for May 2, 2016.
What's Moving the Dow Jones Industrial Average Today: China's PMI Data
Dow Jones futures projected a gain of 10 points as the Chinese PMI index took a bigger hit than economists had anticipated. According to data released last night, the purchasing managers' index (PMI) slipped by 0.1 points to 50.1. That's slightly below economist expectations of a monthly jump to 50.4.
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Here's a breakdown of why the Dow is pushing higher this morning.
- First up, Puerto Rico defaulted on its $422-million debt payment on May 1, with Congress unable to agree on a rescue plan due to concerns about the optics of a bailout bill. That puts even greater pressure on the Commonwealth as its $2 billion payment is due on July 1. Investors remain on edge as the island remains more than $72 billion in debt.
- Over the weekend, Warren Buffett hosted the annual Berkshire Hathaway Inc. (NYSE: BRK.A) shareholder meeting. The Oracle of Omaha offered his insight on Hillary Clinton, his firm's stake in The Coca-Cola Co. (NYSE: KO), and regulatory issues surrounding hedge funds. Buffett and his Vice Chair Charlie Munger conducted a long question-and-answer session with Berkshire investors. For more on the event, check back to Money Morning later today.
- Crude oil prices slipped on news that OPEC crude production increased over the last week. WTI prices slipped 0.8%, while Brent crude slid by more than 1.1%. OPEC crude production increased by several hundred thousand barrels in March to a level that nearly matches the cartel's record daily output in 1997. Here's what you need to know about oil prices and how to profit off the commodity's ongoing rally.
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
- Next, another big merger has fallen through. This time, oilfield services giant Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) have called off their planned $28 billion deal. The companies cited rising regulatory challenges, particularly news that the U.S. Justice Department had sued to block the deal. The deal would have combined the second- and third-largest companies in the sector.
- When former Apple Inc. (Nasdaq: AAPL) cheerleader Carl Icahn announced in a CNBC interview that he had unloaded all 45.8 million of his remaining shares, AAPL stock dipped 2.5%. What does this mean for the stock moving forward? Here's your answer.
- On Friday, Canadian drug maker Valeant Pharmaceuticals International Inc. (NYSE: VRX) filed its overdue 2015 audited financial statements with the SEC.
- On the earnings front, look for additional reports from Sturn, Ruger & Co. (NYSE: RGR), Anadarko Petroleum Corp. (NYSE: APC), Texas Roadhouse Inc. (Nasdaq: TXRH), Tenet Healthcare Corp. (NYSE: THC), Sysco Corp. (NYSE: SYY), and Community Health Systems (NYSE: CYH).
Today's U.S. Economic Calendar (all times EST)
- Atlanta Federal Reserve Bank President Dennis Lockhart speaks at 8:50 a.m.
- PMI Manufacturing Index at 9:45 a.m.
- ISM Manufacturing Index at 10 a.m.
- Construction Spending at 10 a.m.
- 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.
- San Francisco Federal Reserve Bank President John Williams speaks at 5:30 p.m.
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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.