Dow Jones Industrial Average News, 6/22/2016: The cat is out of the bag. On Tuesday, U.S. Federal Reserve Chair Janet Yellen said that stocks are getting overpriced. In a statement, the central bank said valuations are much higher than in the past.
"Forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades," the Federal Reserve wrote in a prepared statement. "Although equity valuations do not appear to be rich relative to Treasury yields, equity prices are vulnerable to rises in term premiums to more normal levels, especially if a reversion was not motivated by positive news about economic growth."
That little nugget slipped under the radar of many in the media. And there are a number of other stories that you might have missed with the markets overly focused on the Thursday "Brexit" vote.
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You can find those answers in today's top stock market news, stocks to watch, ways to profit, and economic calendar for June 22, 2016.
What's Moving the Dow Jones Industrial Average Today: Brexit Back in Focus
Dow Jones futures projected a 14-point gain as statements from Janet Yellen and tomorrow's vote by the United Kingdom on its future in the European Union loom. We've discussed at length here at Money Morning how the Brexit vote could play out over the next 24 hours, and you're going to hear about it non-stop on financial news networks.
But here's what they aren't telling you: How you should be trading the Brexit.
Crude oil prices were ticking higher after an inventory report from the American Petroleum Institute showed a surprise drawdown of crude stocks here in the United States. That doesn't mean that we're in the clear. Keep an eye out on today's inventory report from the U.S. Energy Information Administration.
WTI crude was up 0.6% this morning, while Brent crude added 0.5%.
The housing industry is back in focus today with the release of monthly existing home sales. This morning, shares of KB Home (NYSE: KBH) were up more than 1.5% after KB beat second-quarter earnings expectations.
The Fed is in focus today as Janet Yellen returns to Capitol Hill to testify before the U.S. House Services Committee. Even though Yellen said yesterday that the Federal Reserve wasn't taking sides on the Brexit vote, members of the central bank have certainly expressed their concerns about the possible departure of Britain from the European Union. This morning in an interview with CNBC, Federal Reserve Governor Jay Powell warned that the financial markets – and particularly the banking sector – could experience significant volatility.
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
- Apple Inc. (Nasdaq: AAPL) is snapping free of its historic two-year product cycle with the release of its iPhone 7, writes The Wall Street Journal. The firm hasn't confirmed the device's new features, although several company blogs have speculated on changes to its headphone jack, new camera features, improved battery life, and an improved LCD display. AAPL stock was up 0.7%.
- Shares of Tesla Motors Inc. (Nasdaq: TSLA) were off 13% this morning on news that it will purchase Elon Musk's solar installation firm SolarCity Corp. (Nasdaq: SCTY) in a stock deal that is projected to be $2.8 billion. SCTY stock rose more than 18%. Musk has said that he is sitting out of the decision-making process behind the deal, but he certainly has a massive conflict of interest.
- FedEx Corp. (NYSE: FDX) are falling this morning by 1.2% after the company reported a quarterly loss thanks to a large change to pensions and costs associated with its purchase of the European shipping giant TNT Express. The firm offered a tepid full-year outlook.
- Adobe Systems Inc. (Nasdaq: ADBE) shares are off more than 4.7% despite news that the firm beat quarterly earnings expectations. The firm also announced that its subscription revenue was on the rise last quarter, but investors were largely disappointed after the firm offered a weaker than expected full-year guidance report. The stock has been on a tear over the last 12 months, raising roughly 25% through yesterday.
- Other companies reporting earnings today include Bed Bath & Beyond Inc. (Nasdaq: BBBY), Actuant Corp. (NYSE: ATU), Red Hat Inc. (NYSE: RHT), Barnes & Noble Inc. (NYSE: BKS), and Steelcase Inc. (NYSE: SCS).
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- FHFA House Price Index at 9 a.m.
- Fed Vice Chair Stanley Fischer speaks at 9:25 a.m.
- Existing Home Sales at 10 a.m.
- Federal Reserve Chair Janet Yellen speaks at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 2-Year FRN Note Auction at 11:30 a.m
- 7-Year Note Auction 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.