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Speculation continues to center on the timing of the Federal Reserve's next interest rate hike, which is increasingly less likely to happen given the wealth of negative economic data in recent days.
The odds of a rate hike in September have fallen from 21% to 15%, while the probability for a hike in December has slipped from 51% to 47%, according to CME FedWatch. Look for more speculation with Kansas City Federal Reserve Bank President Esther George speaking later today.
On Tuesday, the Dow added 24 points despite a wave of weak economic data. According to ISM, U.S. services sector activity fell to a 6 1/2-year low in August.
Tuesday's Stock Market Numbers
Dow Jones: 18,538.12; 46.16; 0.25%
S&P 500: 2,186.48; 6.50; 0.30%
Nasdaq: 5,275.91; 26.01; 0.50%
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 13-point decline as investors prepare for the Federal Reserve's Beige Book and a number of different earnings reports on Wednesday. Investors will continue to speculate on the next rate hike after San Francisco Federal Reserve President John Williams announced his support for gradual interest rate hikes in the near future.
Oil prices were on the rise this morning despite news that a deal among OPEC producers is growing increasingly unlikely. Money Morning Global Energy Strategist Dr. Kent Moors explains that the deal has been doomed from the start. The entire idea that OPEC would freeze production has relied on the cooperation of one non-member nation from the start. Moors breaks down what to expect from OPEC.
This morning, the WTI crude price was off 0.1%, while Brent crude slipped 0.1%.
But the big news this morning is happening at investment bank Goldman Sachs Group (NYSE: GS). According to Politico, the bank has banned its company partners from donating money to Republican presidential candidate Donald Trump and other select politicians. The firm said that its ban is "meant to prevent inadvertently violating pay-to-play rules." However, Democratic presidential candidate Hillary Clinton and vice presidential candidate Tim Kaine are not subject to the ban.
Stocks to Watch Today, Sept. 7, 2016
- Shares of Chipotle Mexican Grill Inc. (NYSE: CMG) rallied more than 6.5% in premarket hours after hedge fund manager Bill Ackman purchased a large stake in the firm. Ackman said he plans to talk to the company's leadership and launch an effort to improve the firm's overall performance. The company's stock has been under significant pressure since last year's E. coli outbreak.
- Tech giant Apple Inc. (Nasdaq: AAPL) will host a product presentation today. Analysts anticipate that AAPL stock could rally should the firm unveil its iPhone 7 or a new watch. Investors are still weighing last week's ruling by the European Commission that the company must pay $14.5 billion in back taxes and penalties to Ireland. Despite the ruling, investors have very little to worry about when it comes to AAPL stock. Apple is one of the best and most profitable companies in the world. [Editor's Note: Here's why we rank AAPL stock a "Buy."]
- On the earnings front, shares of Western Digital Co. (NYSE: WDC) were up 6.2% after the hard disk drive maker topped earnings expectations and raised its forward guidance. The firm said it expects higher earnings expectations after its recent purchase of SanDisk Corp. (Nasdaq: SNDK).
- Look for additional earnings reports today from Francesca's Holdings Co. (Nasdaq: FRAN), Tailored Brands Inc. (Nasdaq: TLRD), Guidewire Software Inc. (NYSE: GWRE), Verint Systems Inc. (Nasdaq: VRNT), Malibu Boats Inc. (Nasdaq: MBUU), and the The Valspar Corp. (NYSE: VAL).
Finally, if you want to make money in this market, you need to know about stocks we like to call "Glocals." These stocks capture upside growth and provide strong dividends due to their remarkable cash flows. And one Glocal that has already provided Money Morning readers with a 360% return is poised for even greater gains. Check it out, right here.
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Redbook at 8:55 a.m.
- Kansas City Federal Reserve Bank President Esther George speaks at 10 a.m.
- JOLTS at 10 a.m.
- Beige Book at 2 p.m.
Up Next: Stocks that pay dividends deliver triple the returns of nonpayers. And these "dividend kings" have boosted payouts 50 years in a row…
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.