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Dow Jones Industrial Average News, 6/22/16 – Another day, another downgrade for the U.S. economy. The International Monetary Fund announced the U.S. economy is only set to grow by 2.2%, down from its previous forecast of 2.4%. The IMF also called for "very gradual" increases in interest rates at a time that the global economy is continually stuck in neutral.
The ongoing concerns about the Brexit and weak global economic growth have been fueled by flailing policies enacted by central banks. Money Morning Capital Wave Strategist Shah Gilani says that we could be on the verge of seeing the end of central banks around the globe.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
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Dow Jones: 17,780.56; -49.17; -0.28%
S&P 500: 2,085.44; -3.45; -0.17%
Nasdaq: 4,833.32; -10.44; -0.22%
Now, here's the top stock market news today…
DJIA Today: Yellen Testifies Before the House; Markets Eye Brexit Thursday
First up, U.S. Federal Reserve Chair Janet Yellen testified before the House Financial Services Committee on a number of topics including the jobs sector, the economic performance of minority communities, monetary policies, the impact of regulation on the financial sector, and congressional legislation on stress testing.
Yellen said that the labor market "is in a pretty healthy condition." But Committee Chairman Jeb Hensarling (R-TX) accused the Federal Reserve of being "complicit" in the seven-year failure of the Obama administration to push the economy into an annual growth rate above 3%. Yellen was put on the defensive by Republicans, while Democrats were eager to defend the central bank and beat back any calls that would regulate in any capacity.
Tomorrow is judgement day for the United Kingdom, as British voters take to the polls and decide whether or not to begin the process of leaving the European Union. Polls suggest that the "Remain" camp has a steady advantage this week, but expect some nail-biting all day tomorrow.
According to The Telegraph, Brexit voting results won't be disclosed until "breakfast time" on June 24.
The potential exit of Britain has investors looking for a way to profit no matter what voters decide this week. The thing is, most pundits are looking at how to trade the Brexit the wrong way. America's #1 Trader Tom Gentile offers a simple way to trade the Brexit, and it's the best opportunity to generate alpha this week. Click here to learn about this trade.
Crude oil prices were sliding after a surprise inventory report from the U.S. Energy Information Administration (EIA) showed a smaller than expected drawdown in U.S. inventories. The 917,000 barrel drawdown is a significantly smaller number than the 5.2 million barrels reported by the American Petroleum Institute yesterday.
WTI crude fell 1.4%, while Brent crude slid 1.3%. Here's all you need to know about oil prices ahead of the Brexit vote.
But the big news today was the $2.8 billion deal of Tesla Motors Inc. (Nasdaq: TSLA) agreeing to take over SolarCity Corp. (Nasdaq: SCTY). TSLA stock fell by more than 7.3% after the company purchased Elon Musk's solar installation company. Wall Street was not impressed by a deal that has serious conflicts of interest for Musk. Oppenheimer trashed the deal and downgraded TSLA stock, arguing that the deal was a poor allocation of the electric motor vehicle manufacturer's capital and human resources. SCTY stormed more than 4% on the news.
Now, let's look at the day's biggest stock movers and your trade of the day…
Top Stock Market News Today
- It was a big day for homebuilder KB Home (NYSE: KBH), which beat second-quarter expectations on Wall Street. Shares of KB stock ticked up 3.1% thanks to the strong earnings statement and on the heels of a positive existing home sales report. U.S. existing home sales roared to their highest levels in nine years, fueled by the low interest rate environment.
- Companies reporting earnings today after the bell include Bed Bath & Beyond Co. (Nasdaq: BBBY), Red Hat Inc. (NYSE: RHT), and Barnes & Noble Inc. (NYSE: BKS).
- On the deal front, there's a lot of chatter on the floor that Williams-Sonoma Inc. (NYSE: WSM) is considering a $50-per-share buy of Restoration Hardware Holdings Inc. (NYSE: RH). The rumors started after BB&T Corp. (NYSE: BBT) pitched the idea after Restoration Hardware reported a surprise quarterly loss recently.
- On the financial front, shares of Deutsche Bank (NYSE: DB) pushed up 1.2% on news that the world's largest bank by assets plans to shut down a large amount of its retail locations in Germany. The firm is going to cut roughly 200 of its more than 700 locations. It has already closed dozens of locations in neighboring European nations.
- Finally, here is your stock of the day. With the Brexit on tap, Money Morning Chief Investment Strategist Keith Fitz-Gerald – a seasoned market analyst with three decades of experience – recommends two ways you can make money from the vote on Thursday. Here's what you need to know.
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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.