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This morning, the Dow Jones Industrial Average was trending higher as investors digested a major deal in the agricultural sector.
Investors are also still speculating on whether or not the Fed will raise interest rates in September.
Expectations for a rate hike have fallen in recent days after Fed Governor Lael Brainard suggested that the central bank should maintain a loose monetary policy. According to CME FedWatch, the odds of a September rate hike now sit at just 15%.
On Tuesday, the Dow slipped more than 250 points, while all 10 primary S&P 500 sectors were in the red. This was fueled by a sharp downturn in financial stocks as the odds of a rate hike fell again.
Tuesday's Stock Market Numbers:
Dow Jones: 18,067.16; -257.91; -1.41%
S&P 500: 2,127.02; -32.02; -1.48%
Nasdaq: 5,155.25; -56.63; -1.09
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 12-point gain as investors continue to speculate on what will happen at the U.S. Federal Reserve's meeting later this month. Meanwhile, the markets continue to experience a rash of price volatility in the oil sector.
Oil prices were sliding this morning ahead of a key inventory report from the U.S. Energy Information Administration. Yesterday, the American Petroleum Institute (API) announced a smaller increase in domestic crude stocks than economists had anticipated. According to API, there was an inventory build of 1.4 million barrels. The announcement came the same day that the International Energy Agency (IEA) lowered its forecast on global crude demand and projected a larger glut in global supply through the first six months of 2017.
This morning, the WTI crude price was off 0.6%, while Brent crude fell 0.7%.
Investors are keeping a close eye on Wells Fargo & Co. (NYSE: WFC), which remains under very heavy criticism for a three-year scam that ripped off its customers. The company fired more than 5,300 employees who took part in a cross-selling sales scheme that opened millions of fake accounts and charged customers fees for products and services that they didn't need or sign up to own. Despite this massive scam, the company's CEO John Stumpf announced that he will not resign from the company and said that this doesn't define the culture of his firm.
Money Morning Capital Wave Strategist Shah Gilani has called this scam one of the worst in Wall Street history and explains that the firm's culture is rotten to the core. Here's Shah's latest indictment of another Wall Street bank engaging in unethical behavior.
But the big news this morning is the monster deal between German chemical giant Bayer AG (OTCMKTS ADR: BAYRY) and Monsanto Co. (NYSE: MON). After four rounds of bidding, Monsanto agreed to be purchased for $66 billion in a massive deal that will shake up the global agricultural industry.
Stocks to Watch Today, Sept. 14, 2016
- Shares of Ford Motor Co. (NYSE: F) were off 1.2% despite news that the company has unveiled a new growth strategy designed to help bolster its struggling operations. The firm says that it anticipates its overall balance sheet to decline in performance next year, but a rebound is set for 2018.
- Herbalife Ltd. (NYSE: HLF) added another 2.6% thanks to positive sentiment from activist investor Carl Icahn. During the annual Delivering Alpha conference in New York, Icahn said that he had a chance to purchase up to 50% of the health marketing company. Despite his desire to avoid such a large stake, he remains bullish on the firm. He also advocated for the firm to become a private company, a plan that would help it avoid short sellers like Icahn's rival, Bill Ackman.
- Speaking of Ackman, shares of Air Products & Chemicals Inc. (NYSE: APD) were in focus this morning after Pershing Square Capital sold roughly 3.6 million shares in the industrial gas giant. That sale lowered the hedge fund's stake from roughly 17% to a little less than 8% in the firm.
- Look for additional earnings reports today from Cracker Barrel Old Country Stores Inc. (Nasdaq: CBRL), Clarcor Inc. (NYSE: CLC), and Apogee Enterprises Inc. (Nasdaq: APOG).
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- Import and Export Prices at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.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.