We expect volatility to heat up this month. That’s why our list for the best stocks to buy in October 2016 emphasizes quality companies that can survive a volatile market. Before we get started on today’s news, check out the three best stocks to buy in October, right here.
Let’s look at the final numbers on Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones 18,143.38; -195.86; -1.07%
S&P 500 2,151. 2; -20.25; -0.93%
Nasdaq 5,269.15; -49.39; -0.93%
Here’s a look at today’s most important market events and stocks, plus a preview of Friday’s economic calendar.
The Dow Jones fell 195 points after APPL stock received a downgrade, shares of DB stock fell to an all-time low, and volatility hammered the healthcare sector. Shares of Mylan NV (Nasdaq: MYL) fell more than 4.3%, while Teva Pharmaceutical Industries Ltd. (NYSE ADR: TEVA) dipped more than 4.9%.
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The U.S. Commerce Department increased its third estimate for third-quarter GDP. The agency said that GDP expanded by a rate of 1.4% over the quarter, up from last month’s estimate of 1.1%. In positive news for the U.S. economy, consumer spending expanded by 4.3% in the second quarter. Consumer spending comprises roughly two-thirds of domestic economic activity. Despite the positive uptick in spending and growth, don’t expect the data to impact the Federal Reserve’s timing of its next interest rate hike.
Federal Reserve Chair Janet Yellen said yesterday that the Fed is likely to raise rates by the end of the year, but that the central bank was keeping a close eye on inflation. Yellen is set to give a speech later today on monetary policy. Meanwhile, both Kansas City Fed President Esther George and Atlanta Fed president Dennis Lockhart called for a rate hike on Thursday.
The price of crude oil today increased on news of a deal among OPEC suppliers to cap November production in order to support crude levels. This is the global oil cartel's first production deal since 2008, although details remain slightly hazy right now. Overall, OPEC will slash production to roughly 32 million to 33 million barrels per day. As a result, oil prices have been surging this week. Here’s why.
The WTI crude oil price today gained 1.3%. Meanwhile, the Brent crude oil price added 0.7%.
But the big news today was happening in Washington, D.C. On Thursday, Wells Fargo & Co. (NYSE: WFC) CEO John Stumpf was grilled by the House Financial Services Committee over a massive scam that has knocked $20 billion off the firm’s market capitalization. Stumpf has forfeited more than $41 million in bonus money and other compensation after the company created millions of fake accounts and bilked its customers out of money.
The company is also facing sanctions from the Justice Department over claims that the bank improperly repossessed cars owned by military families.
As Money Morning Capital Wave Strategist Shah Gilani explains, the real Wells Fargo scam is a reckless "do whatever it takes" culture that no one stopped.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.