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On Friday, the Dow Jones Industrial Average was trending down in morning hours as investors keep an eye on several upcoming speeches from members of the U.S. Federal Reserve. Although the probability of an interest rate hike remains low for September, Fed officials continue to argue the case for just the second change to monetary policy in a decade.
On Thursday, the Dow slipped more than 46 points after the European Central Bank said it will leave its benchmark interest rate unchanged and that it anticipates low rates to remain for an "extended period."
Let's take a look at Thursday's Stock Market Numbers:
Dow Jones: 18,479.91; -46.23; -0.25%
S&P 500: 2,181.30; -4.86; -0.22%
Nasdaq: 5,259.48; -24.44; -0.46%
Investors are going to be listening for clues into the timing of the next interest rate hike. A recent string of disappointing economic data has left investors totally in the dark about whether there will be a September Federal Reserve rate hike. Here's when we expect the next rate hike.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 97-point decline as investors digest the latest comments from Boston Federal Reserve Bank President Eric Rosengren. This morning, the Fed official said that continued low interest rates have the potential to fuel an overheating domestic economy. Federal Reserve Bank of Dallas President Rob Kaplan speaks later this morning.
Oil prices were pulling back after huge gains on Thursday.
On Thursday, the Energy Information Administration announced a massive drawdown of crude inventories last week. U.S. inventory levels fell by 14.5 million barrels. That is the single largest weekly decline in crude stocks since January 1999.
This morning, the WTI crude price was off 1.4%, while Brent crude fell 1.5%.
Investors are keeping a close eye on shares of Chipotle Mexican Grill Inc. (NYSE: CMG). Yesterday, the company announced that it has settled cases with more than 100 customers who became sick during its foodborne illness outbreak in 2015. The news comes a day after activist investor Bill Ackman's hedge fund announced a large stake in the company and plans to shake up the company. We're not buying into the hype surrounding the Chipotle stock price after Ackman's involvement in the firm. [Editor's Note: Here's why we recommend investors avoid this stock.]
But the big news this morning comes from Libertarian Party presidential candidate Gary Johnson. On Thursday, Johnson made an embarrassing gaffe after asking "What is Aleppo" during an interview with MSNBC. The candidate failed to know that Aleppo is the epicenter of the ongoing crisis in Syria. Johnson has roughly 9% support for the upcoming election and is vying for an opportunity to take part in the debates this fall. Here's more on Johnson's gaffe.
Stocks to Watch Today, Sept. 9, 2016
- Shares of Wells Fargo & Co. (NYSE: WFC) are in focus on news that the investment bank will pay a record fine – $190 million – after thousands of employees created fake accounts and charged customers for fees that they didn't authorize. According to reports, the firm has fired 5,300 employees after they created 1.5 million bank accounts and applied for 565,000 credit cards without authorization. This is the largest fine ever collected by the Consumer Financial Protection Bureau.
- Starbucks Corp. (Nasdaq: SBUX) CEO Howard Schultz has generated a lot of noise after he endorsed Hillary Clinton for president on CNN on Sept. 7. The question investors should ask themselves during this busy political season is if you should buy a stock based on the politics of its CEO? In an appearance on FOX Business' "Varney & Co." yesterday, Money Morning Technical Trading Specialist D.R. Barton answered that question. Here's what he had to say.
- Apple Inc. (Nasdaq: AAPL) stock is falling again this morning. Investors are still reacting to the downgrade of AAPL stock by Wells Fargo & Co. (NYSE: WFC) on Thursday. The downgrade came after the investment bank reevaluated the risks and rewards of the company moving forward. The announcement came a day after Apple unveiled the iPhone 7, the iPhone 7 Plus, and the Apple Watch 2. [Editor's Note: Money Morning Chief Investment Strategist Keith Fitz-Gerald offers his way to profit from the European Commission's recent decision that will force Apple to pay $14.5 billion in taxes and penalties to Ireland, right here.]
- In earnings news, shares of The Kroger Co. (NYSE: KR) were off nearly 1% after the grocery giant announced second-quarter earnings. The firm reported an EPS of $0.47, topping Wall Street expectations of $0.45. However, it fell just shy of bottom-line revenue estimates, leading to a small selloff in pre-market hours.
- Look for additional earnings reports today from Mattress Firm Holding Corp. (Nasdaq: MFRM), Brady Corp. (NYSE: BRC), Hovnanian Enterprises (NYSE: HOV), and Eros International (Nasdaq: EROS).
Today's U.S. Economic Calendar (all times EDT)
- Boston Federal Reserve Bank President Eric Rosengren speaks at 7:45 a.m.
- Federal Reserve Bank of Dallas President Rob Kaplan speaks at 9:30 a.m.
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 p.m.
- Federal Reserve Bank of Dallas President Rob Kaplan speaks at 8:15 p.m.
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.