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The Dow Jones Industrial Average slipped today (Friday) after a settlement by the U.S. Justice Department against a major international bank rocked the U.S. financial sector. Meanwhile, investors continue to speculate on next week's meeting among members of the Fed Open Market Committee.
Let's look at the final numbers on Friday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,123.52; -88.96; -0.49%
S&P 500: 2,139.16; -8.10; -0.38%
Nasdaq: 5,244.57; -5.12; -0.10%
Here's a look at today's most important market events and stocks, plus a preview of Monday's economic calendar.
DJIA Today: Financial Stocks Slump After Regulators Slam Deutsche Bank
The Dow Jones slumped 88 points on Friday, a downturn fueled mainly by a sharp slump in financial stocks. Today, investors weighed another major scandal and expected settlement from Deutsche Bank AG (USA) (NYSE: DB). The news dragged down shares of Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) by more than 1.1%. The S&P 500 financials sector fell by roughly 1% on the day.
Financial stocks also remain under pressure due to fleeting expectations for an interest rate hike. The Federal Reserve meets next week for two days to discuss monetary policy. Since December 2015, investors have anticipated another small rate hike. Despite constant teasing and justification of near-term rate increases, the Fed has largely avoided any upward tick due to concerns about the global economy, consistency in the labor markets, or weakness in its efforts to drive inflation. Here's our latest insight on when to expect the next rate hike.
Oil prices were on the move after Baker Hughes Inc. (NYSE: BHI) reported that the U.S. domestic rig count has increased in 11 of the last 12 weeks. The company reported that the number of rigs increased by two last week to 416 platforms. That's still well below the 644 rigs in domestic operation last year at this time. Meanwhile, concerns about a global glut in supply weighed on investor sentiment after Iranian export levels swelled to pre-sanction levels. The WTI crude oil price today fell 1.5%. Meanwhile, the Brent crude oil price dropped 1.3%.
Money Morning Global Energy Strategist Dr. Kent Moors has just issued his latest oil price prediction. But before we get to that, here's why crude oil prices have been so volatile this week.
The big news today was the latest scandal on Wall Street. Today, Deutsche Bank AG (USA) (NYSE: DB) was off more than 9% on news that the company has been asked by the U.S. government to settle allegations that it misled investors on mortgage-backed securities. The company says it will fight regulators' demand for $14 billion. Once again, we're watching the horrible cycle that allows Wall Street the opportunity to mislead and take money from customers, only to see the complacent U.S. government come in later for its cut of the profits. Money Morning Capital Wave Strategist Shah Gilani highlights a series of wrist slaps from U.S. regulators while no one goes to jail for any of these crimes. Here's his latest take.
Top Stock Market News Today, Sept. 16, 2016
- Congress announced the launch of an investigation into the account practices of Wells Fargo & Co. (NYSE: WFC). The company has been under serious scrutiny after news broke that its employees created millions of fake accounts and charged its customers – in many cases – without authorization. The firm announced it had fired 5,300 employees for the actions, which were fueled by an irresponsible set of incentives.
- Meanwhile, it doesn't get any better in politics. According to reports, the campaign for Hillary Clinton has been authorizing donations from low-income Americans on their credit and debit accounts. Wells Fargo has reported that it receives hundreds of calls each day about donation levels under $100 that were charged to their accounts. The bank says that the campaign has intentionally been keeping these charges under $100 because the bank only triggers a fraud investigation on charges above that level.
- It was a very quiet day for earnings reports. Investors did sell off shares of Oracle Corp. (Nasdaq: ORCL) after the software reported weaker than expected quarterly earnings on Thursday afternoon. The software giant reported adjusted per-share earnings of $0.55, which was $0.03 below Wall Street expectations. No major U.S. companies reported earnings on Friday.
- Shares of Amazon.com Inc. (Nasdaq: AMZN) rallied more than 1% after the company received two price-target upgrades on Friday. RBC reiterated its "Outperform" rating and forecasted a rise to $1,000 per share. Meanwhile, Evercore issued a "Buy" rating and set a target of $1,015 per share.
- Apple Inc. (Nasdaq: AAPL) broke a four-day winning streak, falling 0.5% today. The stock fell due to a lukewarm reception to sales of its new iPhone 7. The stock had been rallying after multiple reports from retailers that pre-order sales of the new devices were very strong. Despite today's slight downturn, Apple is one of the best stocks to own for the long term. In fact, Money Morning Director of Tech & Venture Capital Michael A. Robinson has set a very aggressive stock price target for the firm moving forward. Here's why the Apple stock price is on the rise.
Monday's U.S. Economic Calendar (all times EDT)
- Housing Market Index at 10 a.m.
- 4-Week Bill Announcement at 11 a.m.
- 3-Month Bill Auction at 11:30 a.m.
- 6-Month Bill Auction at 11:30 a.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.