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Welcome back, volatility. The Dow Jones Industrial Average today (Tuesday) cratered 182 points, wiping out yesterday's gains, after positive economic data fueled expectations of a boost in domestic interest rates.
It didn't take long for investors to turn their eyes right back to Aunt Janet Yellen and the Federal Reserve. Today, the U.S. Labor Department announced that consumer price inflation surged at its highest pace since early 2013. Prices increased by 0.4% in April, boosting expectations that the central bank could boost interest rates sooner than expected.
Certain members of the Fed Open Market Committee have said the central bank will increase rates two times this year, although futures data from CME Group indicate an expectation of just one more rate hike. Given weak economic growth in the first quarter, traders do not anticipate a rate hike until September. The Volatility S&P 500 (INDEXCBOE: VIX) – the market's fear gauge – surged more than 7.3%.
Here's what else you need to know about the markets on May 17, 2016.
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First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,527.72; -182.99; -1.03%
S&P 500: 2,047.04; -19.56; -0.95%
Nasdaq: 4,715.73; -59.73; -1.25%
Now, here's the top stock market news today…
DJIA Today: Inflation Levels Rally to Three-Year High, Oil Prices Rise
George Soros is betting big against the U.S. stock market. According to regulatory filings with the SEC, Soros has boosted his negative bet against the S&P 500 to more than $430 million. Soros – best known for his historic bet against the Bank of England and the man who broke the pound – also dramatically increased his holdings in a gold ETF and took a new position in the world's largest gold miner, Barrick Gold Corp. (NYSE: ABX). Soros is ringing the alarm bells over the state of the Chinese economy and the global financial system's exposure to the Asian nation.
Meanwhile, crude oil prices are slowly ticking towards $50 per barrel due to ongoing supply disruptions across Venezuela, Canada, and Nigeria. The disruptions come a day after Goldman Sachs Group Inc. (NYSE: GS) announced that it believes the two-year global glut has finally eased. On the day, WTI crude added 1.3%, while Brent crude pushed up 0.7%.
In the energy sector, key stocks include Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM), which saw shares decline 0.4% and 0.1%, respectively. Today's top performer in the sector was Tallgrass Energy GP LP (NYSE: TEGP), which saw shares pop more than 13.6% after the company improved its forward guidance.
But the big news today was Home Depot Inc. (NYSE: HD). The firm topped Wall Street earnings expectations of $1.21 per share by $0.23 and said that its existing-stores sales rallied 6.5% over the quarter. The firm said that the average shopper is spending a little more than $60 per visit, which is the highest average since 2006. Despite the positive earnings number and the complementary boost in the housing sector, HD stock was off a surprising 2.6% on the day.
Now, let's look at the day's biggest stock movers and the must-own stock for today…
Top Stock Market News Today
- Today, Alphabet Inc. (Nasdaq: GOOGL) stock was off 1.3% despite news that the firm is testing a new carpool service through its navigation app called Waze. The firm is currently setting up a payment system that would allow drivers and carpoolers to locate one another, a deal that would compete against other ride-sharing services Uber and Lyft. The pilot service will begin in San Francisco soon and will allow 25,000 people to experiment with the project.
- On the earnings front, shares of retailer TJX Companies Inc. (NYSE: TJX) pushed up nearly 2% after the firm topped Wall Street expectations and said that quarterly sales increased by nearly 10%.
- An activist shareholder is shaking up things at Pandora Media Inc. (NYSE: P). Hedge fund Corvex Management announced a 9.9% stake in the music-streaming firm and is pushing for the board of directors to explore a sale of the firm. P stock gained 7.3% today.
- Shares of LendingClub Corp. (NYSE: LC) fell another 10.5% after investors suspended purchases of consumer debt due to a federal grand jury subpoena from the U.S. Justice Department over the firm's lending practices. Today's downturn is the latest problem for a firm that saw its CEO resign in disgrace last week and its stock fall more than 50%.
- Shares of Hewlett-Packard Enterprises (NYSE: HPE) were falling despite news that the firm plans to start selling its new 3D printer, the HP Jet Fusion printer. The firm says that it prints 10 times faster than available machines on the market and will allow owners to dramatically reduce input costs by at least 50%.
- Finally, here is your stock pick of the day. If you want to grow your wealth by 13% over the next five years, this is the stock to own. These are safe, reliable returns that you won't find anywhere else these days. Be sure to check out this can't-miss stock, right here.
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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.