Dow Jones Industrial Average News, 5/17/2016: The Fed is back in focus - again - on Tuesday as investors keep their eyes on a key inflation report that could surprise the markets.
With the Fed looking to increase interest rates at least two more times in 2016, a sharp gain could put talk of a June rate hike back on the table.
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But the real talk today is about the Brexit. Should voters in the UK choose to leave the European Union next month, it would have a far more pronounced impact on the markets than any marginal increase in the baseline U.S. interest rates. The largest five U.S. banks currently have more than 40,000 employees in London.
The Brexit would force them to reconsider their commitments in the country that have been boosted by the EU's universal "pass-porting" regime.
Don't sleep on the Brexit. We'll offer much more insight in the weeks to come.
Here's today's top stock market news, stocks to watch, ways to profit, and economic calendar for May 17, 2016.
What's Moving the Dow Jones Industrial Average Today: Oil Prices Ease
Dow Jones Industrial futures projected an 8-point decline for Tuesday as oil prices reversed from yesterday's sharp rally. Oil prices steadied a day after Goldman Sachs Group Inc. (NYSE: GS) called for an end to the global supply glut.
Here's a breakdown of why the Dow is pushing lower this morning.
- First up, it's the battle of the billionaires. Over the weekend, investors learned that Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A) informed investors through a 13-F filing it has 9.8 million shares in Apple Inc. (Nasdaq: AAPL). The big bet on Apple comes at a time that Carl Icahn and his Icahn Enterprises LP (NYSE: IEP) dumped their entire stake in the firm due to concerns about AAPL's ability to compete in China. AAPL stock was up 0.4% in early this morning.
- Speaking of billionaires: George Soros' fund has doubled down on his bet against the S&P 500, according to regulatory filings. Soros Fund Management has taken a bearish stance as the billionaire argues that a repeat of the 2008 financial crisis is possible due to the world's exposure to China's economic problems.
- On the economic front, look out for the latest monthly report on consumer price inflation from the Bureau of Labor Statistics. The report will put the June FOMC meeting in focus as the nation's central bank looks toward the timing of its next rate hike. Low inflation has hindered the process of rate normalization since the Fed ended its quantitative easing programs. Meanwhile, the housing sector is in focus when the Census Bureau offers a monthly update on housing starts and building permits.
- WTI crude oil prices were pushing higher by 0.4% this morning as supply outages in Canada continued to offer support. Investors also anticipate that another wave of consolidation could be possible for the energy sector in the months ahead. Meanwhile, Brent crude prices were sliding by 0.2%, despite news that the International Energy Agency now anticipates a decline in annual production from some members of OPEC. The global energy watchdog cited Venezuela's ongoing economic collapse and lack of capital as a prime example.
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
- Home improvement retailer Home Depot Inc. (NYSE: HD) does what it does best as spring hits full bloom. The firm topped Wall Street earnings expectations of $1.21 per share by $0.23. Shares still fell by 0.8% before the bell.
- Shares of Apple Inc.'s suppliers rose in pre-market hours on news of Warren Buffett's massive stake. The multibillion-dollar investment stoked optimism in shares of the technology giant and all elements of its supply chain.
- Shares of retail giant TJX Companies Inc. (NYSE: TJX) pushed up more than 3.2% ahead of the firm's earnings report this morning.
- On a light day of earnings, look for additional reports from Red Robin Gourmet Burgers Inc. (Nasdaq: RRGB), Childrens Place Inc. (Nasdaq: PLCE), Vipshop Holdings Ltd. (NYSE: VIPS), and Acxiom Corp. (Nasdaq: ACXM).
Today's U.S. Economic Calendar (all times EDT)
- Consumer Price Index at 8:30 a.m.
- Housing Starts at 8:30 a.m.
- Redbook at 8:55 a.m.
- Industrial Production at 9:15 a.m.
- E-Commerce Retail Sales at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- San Francisco Federal Reserve Bank President John Williams speaks at 12 p.m.
- Dallas Federal Reserve Bank President Robert Kaplan speaks at 1:15 p.m.
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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.