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Dow Jones Industrial Average News, 5/27/16: All eyes are on Federal Reserve Chair Janet Yellen this morning. The Federal Reserve Chair and the nation's top monetary policy expert will be speaking at the Harvard Club later this afternoon.
But that's not all. Here's today's top stock market news, stocks to watch, ways to profit and economic calendar for May 26, 2016.
What's Moving the Dow Jones Industrial Average Today: Fed Chair Janet Yellen
Dow Jones Industrial Average futures were flat this morning as investors await a speech from Federal Reserve Chair Janet Yellen. The futures projected a 17-point gain at the opening bell.
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Here's a breakdown of why the Dow fell flat this morning.
First up, investors are weighing the second revision of U.S. first-quarter GDP. Last month, the U.S. Commerce Department reported a dismal growth figure of 0.5%, raising concerns about the health of the domestic manufacturing sector. This month, the number was revised upward to 0.8%. Despite lackluster growth, economists are projecting a strong pace for the second quarter, buoyed by tightening labor conditions, rising wages, and improving home sales.
Meanwhile, the most boring debate from the seven-year tenure of the Obama administration is back in focus. Republican front-runner Donald Trump said that he would reverse regulatory decisions and approve the Keystone XL Pipeline if he becomes president. Trump said that energy dominance would be central to his administration's economic and foreign policy efforts.
As we have explained here on numerous occasions, the idea is completely irrelevant. The pipeline will not reduce crude oil prices in the United States and the environmental impact of the project is negligible. This means that both the pro and against arguments regarding the pipeline have been flawed from the beginning. That being said, shares of TransCanada Corp. (USA) (NYSE: TRP), are in focus today.
Crude oil prices retreated below $50 per barrel, easing from a seven month high. Crude prices have been rallying in recent weeks as supply concerns abate and investors continue to enjoy the price rally in the global commodity sector. WTI crude fell 0.7%, while Brent crude dipped 1.1% in early trading. Crossing the psychological barrier of $50 per barrel could drive U.S. producers in the shale industry to return to operations after months of being shut down. Meanwhile, a possible deal among OPEC producers to provide a floor to prices remains in jeopardy due to Iran's unwillingness to participate.
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
- Is there blood in the water? Shares of Alibaba Group Holding Ltd (NYSE: BABA) are under pressure as short circles hound the firm due to accounting concerns. Notable short sellers include hedge fund managers Jim Chanos of Kynikos Associates and John Hempton of Bronte Capital. BABA stock is off 0.4%.
- Shares of Yahoo Inc. (Nadsaq: YHOO) were moving up 0.4% as speculation heats up over a possible bid for the technology giant. This morning, reports indicated that Verizon Communications (NYSE: VZ) was working with Bank of America Corp. (NYSE: BAC) to establish a strong bid for the firm's core internet business. The announcement comes one day after it was reported that AT&T Corp. (NYSE: T) had prepared a bid for the firm's core assets.
- In deal news, shares of Valeant Pharmaceuticals International (NYSE: VRX) pushed up nearly 8% on news that the drug maker avoided a takeover offer earlier this year. The firm said this morning that it rejected an offer made by Takeda Pharmaceutical and private-equity giant TPG Capital earlier this year.
- On the earnings front, shares of Big Lots Inc. (NYSE: BIG) were up 13.6% after the retailer shattered earnings expectations for its previous quarter. The company beat top-line earnings expectations by $0.12 and hiked its full-year outlook.
- On the earnings front, look for reports from JA Solar Holdings Co. (Nasdaq: JASO), Big Lots Inc. (NYSE: BIG), and Multi-Color Corp. (Nasdaq: LABL).
Today's U.S. Economic Calendar (all times EST)
- GDP at 8:30 a.m.
- Corporate Profits at 8:30 a.m.
- Consumer Sentiment at 10 a.m.
- Baker-Hughes (NYSE: BHI) Rig Count at 1 p.m.
- Federal Reserve Chair Janet Yellen speaks at 1:15 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.