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Traders are also digesting weekly jobless data to get a better sense of the health of the economy.
Last week, 278,000 Americans sought unemployment benefits, slightly higher than expectations of U.S. economists. Pay attention to speeches later today from two members of the Fed Open Market Committee, whose speeches could offer additional insight into the timing of the next rate hike.
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Here's today's top stock market news, stocks to watch, ways to profit, and economic calendar for May 19, 2016.
What's Moving the Dow Jones Industrial Average Today: The Federal Reserve
Dow Jones futures were off 20 points early this morning as oil prices slid. Investors are also concerned that the Federal Reserve could raise interest rates sooner than they had previously expected. A bright spot this morning is the strong earnings report from one of the world's largest retail giants.
Here's a breakdown of why the Dow is pushing lower this morning.
First up, a rate hike is back on the table from the Federal Reserve according to FOMC minutes from its April meeting. This week's consumer price report indicated that inflation levels increased in April by its strongest monthly pace since early 2013. The expectation of a rate hike is pushing the dollar up and fueling a rally in financial stocks. Commodities like gold, silver, and oil are slipping due to the stronger greenback.
CME FedWatch, a tool that monitors expectations of an interest rate hike, projects a 30% probability for a rate hike in June, and a 52% chance of a rate increase in July. That is much sooner than what markets expected last week before the release of the April Consumer Price Index.
Bitumen oil prices slipped below $8 per barrel as Canadian firefighters have received help from Mother Nature in fighting the wildfires that have plagued production in recent weeks. Meanwhile, Exxon Mobil Corp. (NYSE: XOM) announced that it is boosting production in Nigeria in order to offset export weakness in the oil-rich nation. WTI crude prices were off 2.2%, while Brent crude fell 2.6%.
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 Wal-Mart Stores Inc. (NYSE: WMT) are pushing higher this morning after the global retail giant beat Wall Street earnings expectations of $0.88 per share by $0.10. The stock rallied roughly 10% before the opening bell Thursday, which is a badly needed win for retail stocks. The report comes a day after WMT rival Target Corp. (NYSE: TGT) badly missed quarterly expectations and issued a cautious outlook for its upcoming quarter. TGT stock fell 7.6% on Wednesday, but ticked up 0.5% early this morning.
- Tesla Motors Inc. (Nasdaq: TSLA) shares were ticking higher despite news that the firm plans to issue up to $1.7 billion in new stock to finance the expansion of its Model 3 launch. The firm has received 373,000 reservations for the new Model 3 vehicle and plans to ramp up production annual capacity to 500,000 by 2018.
- Shares of Monsanto Co. (NYSE: MON) were up nearly 8% this morning on news that German chemical giant Bayer AG (OTCMKTS ADR: BAYRY) has offered an unsolicited takeover bid for the international seed giant. The deal would create the world's largest agricultural supplier and easily surpass the $42 billion deal received by Syngenta AG (NYSE ADR: SYT) earlier this year.
- On the earnings front, look for reports from Hewlett Packard Enterprise Co. (NYSE: HPE), Gap Inc. (NYSE: GPS), Dick's Sporting Goods Inc. (NYSE: DKS), Ross Stores Inc. (Nasdaq: ROST), Applied Materials Inc. (Nasdaq: AMAT), and Advance Auto Parts Inc. (NYSE: AAP).
Today's U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- Philadelphia Fed Business Outlook Survey at 8:30 a.m.
- Chicago Fed National Activity Index at 8:30 a.m.
- Fed Vice Chair Stanley Fischer Speaks at 9:15 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Leading Indicators at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- New York Fed Bank President William Dudley Speaks at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 52-Week Bill Announcement at 11 a.m.
- 5-Year Note Announcement at 11 a.m.
- 7-Year Note Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 2-Year Note Announcement at 11 a.m.
- 2-Year FRN Note Announcement at 11 a.m.
- 10-Year TIPS Auction at 1 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.