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Dow Jones Industrial Average News, 5/12/2016: While the markets hover north of 17,700, gold prices continue to surge, according to the World Gold Council. Over the first quarter, gold prices increased by 21%, the hottest start to a year for the yellow metal yet.
Even with inflation levels largely in check, the ongoing global macroeconomic insecurity of recent months has fueled the surge.
That should tell you about the disconnect between the stock market and the real economies of beleaguered nations around the world. The U.S. Federal Reserve continues to provide accommodation given weakness in manufacturing and other factors (even if they won't admit it), while China's devaluation concerns and negative interest rates in Europe and Japan weigh on sentiment.
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Not only should that make for an interesting Thursday trading session, but it should also raise broader concerns about the future health of the global economy.
Here's today's top stock market news, stocks to watch, ways to profit, and economic calendar for May 12, 2016.
What's Moving the Dow Jones Industrial Average Today:
Dow Jones futures were up roughly 12 points as investors weighed a very busy day of economic data. Investors are attempting to catch their breath after yesterday's more than 200-point decline. Yesterday, the retail sector had its worst one-day trading session since 2011.
Here's a breakdown of why the Dow is pushing higher this morning.
- First up, Brazilian lawmakers were voting on whether to impeach President Rousseff over corruption charges. The nation's Senate has been in a marathon debate about her political future in one of the most commodity-rich nations in the world and ahead of the very public 2016 Summer Olympics.
- Yesterday's weak retail earnings and sales reports raised broader concerns about the health of the U.S. economy. In fact, many banks that had expected the Fed to raise interest rates in June have now revised their forecasts. In addition, concerns about domestic payrolls continue to weigh on investor sentiment after the lackluster April jobs report.
- The 2016 Salt Conference enters its second day in Las Vegas, with many of finance's biggest names meeting to discuss what lies ahead for the U.S. economy. Yesterday's top issue on the ground wasn't oil prices. All day, the big focus was on the possibility of a Trump presidency. The conclusion: Gold prices could see a rally if Trump provides any political risk. So, should you buy gold if Donald Trump becomes president?
- WTI crude oil prices were flat this morning as investors weighed news that Canadian officials have tamed the wildfires that hindered production across the oil-rich province of Alberta. Producers of the region have gradually been turning on their production, while traders have been taking profits off the table after yesterday's rally. Crude prices popped on Wednesday after the U.S. Energy Information Administration announced a surprise decline in domestic crude stocks. It was the first weekly decline for U.S. crude inventories in six weeks. Meanwhile, Brent crude prices are in focus on news that OPEC is exploring strategic options to support crude ahead of the June 2 meeting. Last month, both Iran and Saudi Arabia were unable to reach an agreement that would support crude prices and help offset continued weakness in prices. That news accompanies a new release that expects the global crude oversupply to abate "significantly" over the balance of 2016.
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
- Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) are now off more than 20% this week as new concerns have arisen over the firm's operations. Here's why VRX stock is falling this week.
- Shares of Macy's Inc. (NYSE: M) fell more than 15% yesterday after the company reported a sharper sales decline than investors had anticipated. The stock is now trading at a four-year low. The firm says that a cooler than expected spring season affected sales demand. The news pulled down shares of rivals Kohl's Corp. (NYSE: KSS), Nordstrom Inc. (NYSE: JWN), and JCPenney Co. Inc. (NYSE: JCP) more than 2%.
- Meanwhile, shares of Office Depot Inc. (Nasdaq: ODP) cratered nearly 40% on Wednesday, and shares of Staples Inc. (Nasdaq: SPLS) fell 18% on news that a federal judge has blocked a merger between the two office retail giants over antitrust concerns.
- On the earnings front, look for additional reports from NVIDIA Corp. (Nasdaq: NVDA), Nordstrom Inc. (NYSE: JWN), Ralph Lauren Corp. (NYSE: RL), Symantec Corp. (Nasdaq: SYMC), Shake Shack Inc. (NYSE: SHAK), Kohl's Corp. (NYSE: KSS), and Perrigo Co. (NYSE: PRGO).
Today's U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- Import and Export Prices at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 10-Year TIPS Announcement at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- Cleveland Federal Reserve Bank President Loretta Mester speaks at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- Boston Federal Reserve Bank President Eric Rosengren speaks at 11:45 a.m.
- 30-Year Bond Auction at 1 p.m.
- Kansas City Federal Reserve Bank President Esther George speaks at 2:15 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 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.