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Dow Jones Industrial Average News 6/16/2016: The U.S. economy is again facing lower growth expectations, setting off more concerns about the health of the global economy ahead of next week's critical "Brexit" vote.
The U.S. Federal Reserve slashed its U.S. economic growth forecast for 2016 and 2017 to a lackluster 2% and 2.1%, respectively.
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As Money Morning Global Credit Specialist Michael Lewitt explains, Fed Chair Janet Yellen and her band of central bankers still don't seem to get it.
Here's today's top stock market news, stocks to watch, profit opportunities, and economic calendar for June 16, 2016.
What's Moving the Dow Jones Industrial Average Today: Brexit Fears Continue
Dow Jones futures projected a 65-point decline after the Federal Reserve, the Bank of England, and the Bank of Japan held interest rates in place. The BOJ also announced that it doesn't plan to pump additional stimulus dollars into the economy, a decision that pushed the Yen higher against the U.S. dollar.
Here's a breakdown of other reasons why the Dow is pushing lower this morning.
First up, Federal Reserve Chair Janet Yellen said on Wednesday that ongoing geopolitical challenges like the possible Brexit could hinder economic growth and prevent future interest-rate increases. Central banks around the world are taking a cautious approach to the Brexit.
As a reminder, on June 23, voters from the United Kingdom will vote on whether or not they will begin the process of departing the European Union, which is the world's largest economic bloc. With polls indicating that the vote could come down to the wire – and that a rising number of British voters are planning on voting in favor of a departure from the E.U. – traders are realizing the economic calamity that could soon follow. But despite all the short-term concerns, Money Morning Global Credit Strategist Michael Lewitt says that an exit from the EU could be a great thing for the markets over the long term. Here's why.
On the deal front, Envision Healthcare Holdings Inc. (Nasdaq: EVHC) stock fell 7.4% on news that it will merge with Amsurg Corp. (Nasdaq: AMSG). The deal will create a massive physician services company with a combined value of approximately $15 billion.
Crude oil prices slipped to a three-week low on news of a smaller-than-expected drawdown in U.S. domestic inventories. Concerns about the Brexit also continue to weigh on trader sentiment. WTI crude slipped another 1.3% to a three-week low, while Brent crude dipped another 1.4%.
The energy sector also had a big acquisition this morning. Shares of Pioneer Natural Resources (NYSE: PXD) dipped 3.5% after announcing plans to purchase real estate holdings from Devon Energy (NYSE: DVN) in a deal worth roughly $858 million.
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
- The deals keep coming in the semiconductor business. Shares of QLogic Corp. (Nasdaq: QLGC) rallied more than 10% on news that it will be purchased by chipmaker Cavium Inc. (Nasdaq: CAVM) for $1.36 billion. The deal sent shares of CAVM down more than 14%. Meanwhile, shares of ASML Holdings NV (ADR) (Nasdaq: ASML) were off slightly on news that it will purchase Taiwanese chipmaker Hermes Microvision for roughly $3.1 billion.
- On the earnings front, shares of Rite Aid Corp. (NYSE: RAD) were off 1.2% after the company reported fiscal first-quarter earnings. The firm fell short of Wall Street earnings per share (EPS) expectations of $0.05 by four cents. The pharmaceutical retailer was also short on bottom-line numbers.
- It wasn't CEO Mark Zuckerberg's broken arm making so much buzz yesterday, but the changes that could be coming to Facebook Inc. (Nasdaq: FB) within the next five years. According to Nicola Mendelsohn, vice president for Facebook in the EMEA region, your Facebook feed could be "all video" in the future. The company has said that daily views of video have increased from 1 billion to 8 billion in the last year. That type of innovation and the ongoing rise of its user base are reasons why investors should be excited. Here's another reason that you might be overlooking FB stock and why you should own it.
- Look for additional earnings reports from Oracle Corp. (Nasdaq: ORCL), Smith & Wesson Holding Corp. (Nasdaq: SWHC), The Kroger Co. (NYSE: KR), and Finisar Corp. (Nasdaq: FNSR).
Today's U.S. Economic Calendar (all times EST)
- Consumer Price Index at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Philadelphia Fed Business Outlook Survey at 8:30 a.m.
- Current Account at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Housing Market Index at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 52-Week Bill Announcement at 11 a.m.
- 2-Year Note Announcement at 11 a.m.
- 2-Year FRN Note Announcement at 11 a.m.
- 5-Year Note Announcement at 11 a.m.
- 7-Year Note Announcement at 11 a.m.
- 30-Year TIPS Announcement at 11 a.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.