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It's the latest signal that the markets are still overly reliant on the words and actions of the U.S. Federal Reserve, which holds its next policy meeting on June 14-15.
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Yesterday, New York Fed President William Dudley said in a speech that the American economy is strong enough and can handle a rate hike this summer. That weighed on investor sentiment, as the S&P 500 is on pace for its first four-week slide since 2014.
Here's today's top stock market news, stocks to watch, ways to profit, and economic calendar for May 20, 2016.
What's Moving the Dow Jones Industrial Average Today: The Federal Reserve
Dow Jones futures were up 37 points as investors digest the possibility of a rate hike this summer. This morning, housing figures are in focus with the release of the monthly existing home sales report. Economists are anticipating a second-straight month of positive data. Economists also expect the spring housing market will continue to gather some steam.
Here's a breakdown of why the Dow is pushing higher this morning.
First up, the National Association of Realtors is poised to announced the April report for existing U.S. home sales. Traders are hoping that the housing sector can continue its positive momentum. Given the industry's importance in the U.S. economy, this report could influence the timing of the next interest rate hike.
It's so odd, it reads like a Hollywood film. Phil Mickelson has settled with U.S. Securities Exchange Commission for his involvement over a $40 million insider-trading scheme. According to the agency, the professional golfer earned roughly $931,000 after receiving an insider tip on the quarterly performance of Dean Foods (NYSE: DF) and a related company. The story grows even more bizarre when one discovers that Mickelson received the tip from a professional gambler – to whom the golfer owed money. In addition, the gambler allegedly received his inside information from none other than the former Dean Foods Chairman Thomas Davis. Mickelson chose to not go the Martha Stewart route and settled the case for roughly $1 million and interest.
WTI crude oil prices ticked slightly lower as supply concerns remain in focus on Friday. Concerns about Nigeria's production level weighed on investor sentiment. WTI crude prices were flat, while Brent crude dipped 0.3%. That said, oil prices are hovering right around $50 per barrel as global supply disruptions continue to plague oil-producing nations like Nigeria, Canada, and Venezuela.
Be sure to pay attention to this afternoon's report on the status of U.S. production when Baker Hughes Inc. (NYSE: BHI) reports its weekly rig count.
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
- On the earnings front, shares of Deere & Co. (NYSE: DE) pushed higher after the company announced earnings per share (EPS) of $1.56, topping Wall Street expectations by $0.09. The heavy machine manufacturer said that the global agriculture sector has slowed down; however, the firm said that its focus on cost containment helped it overcome low expectations for the quarter.
- On the deal front, shares of InterOil Corp. (NYSE: IOC) surged more than 30% early this morning on news that it agreed to be purchased by Oil Search Ltd. (ASX: OSH) for an estimated $2.2 billion. Meanwhile, The Wall Street Journal reports that Verizon Communications Inc. (NYSE: VZ) and several other suitors are planning a $2 billion to $3 billion offer for the core business of Yahoo! Inc. (Nasdaq: YHOO). Despite the deal news, YHOO stock is off more than 5% this morning.
- Shares of Twitter Inc. (NYSE: TWTR) are in focus as the firm prepares for its annual shareholder meeting on May 25. Twitter just announced that it will prohibit the re-pricing of employee stock options without holding a vote on the matter with shareholders. The social media giant has been under sustained pressure since founder and CEO Jack Dorsey reassumed control of the firm. TWTR stock was up 0.6% before the bell.
- Shares of Kinder Morgan Inc. (NYSE: KMI) ticked up more than 4.1% thanks to a positive policy announcement from the Canadian government. Canada's National Energy Board formally approved the firm's pending expansion of a major pipeline.
- On the earnings front, look for reports from Foot Locker Inc. (NYSE: FL), Campbell Soup Co. (NYSE: CPB), Hibbett Sports Inc. (Nasdaq: HIBB), and Buckle Inc. (NYSE: BKE).
Today's U.S. Economic Calendar (all times EDT)
- Federal Reserve Gov. Daniel Tarullo Speaks at 9 a.m.
- Existing Home Sales at 10 a.m.
- Baker Hughes Rig Count at 1 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.