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The Dow Jones Industrial Average pushed higher as traders dissected an update from the Federal Reserve.
Financial stocks were performing strongly on Wednesday as investors anticipate a rate hike in the months ahead. Rising expectations for a December rate hike pushed financial stocks higher.
Let's look at the final numbers on Wednesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,144.20; 15.54; 0.09%
S&P 500: 2,139.17; 2.44; 0.11%
Nasdaq: 5,239.02; -7.77; -0.15%
Now, here's a look at today's most important market events and stocks, plus a preview of Thursday's economic calendar.
DJIA Today: December Rate Hike Back in Focus, Oil Prices
The Dow Jones gained 15 points as traders eyed several speeches from Federal Reserve officials and they digested the release of minutes from the central bank's September meeting. According to the meeting minutes, the Federal Reserve took a hawkish slant during last month's meeting. Several officials worry that the Fed must raise rates soon in order to stave off a recession.
There's just one big problem with rate hikes that no one seems to be discussing in the mainstream press. When rates increase, so do the debt burdens taken on from companies that have gobbled up cheap money during the Era of the Federal Reserve. When the central bank increases rates, they'll light the fuse of a massive "debt bomb" the could trigger disaster. We dug into the numbers, and we've found seven companies that are poised for lots of pain when rates go higher. You don't want to miss this stunning report.
It was another big day for the alternative transportation sector. This morning, General Motors Co. (NYSE: GM) announced it had invested in a Chinese car-sharing company called Yi Wei Xing Technology Co. GM declined to announce the size of the investment, but it's the latest sign that industry giants are transitioning to newer technologies to compete against upstart firms.
The price of crude oil today fell thanks to a surging U.S. dollar and speculation on the outlook for OPEC in the wake of its production cap deal. The U.S. Dollar Index is near a seven-month high as traders eye the possibility of pound-dollar parity in 2017. Traders have been concerned about the intentions of OPEC producers Iran and Saudi Arabia and the feasibility of the cuts in the near future. Money Morning Global Energy Strategist Dr. Kent Moors says that Saudi Arabia is playing games with this production deal and that all eyes will be on the next OPEC meeting on Nov. 30 at its Secretariat in Vienna. Here's Moors' latest insight.
The WTI crude oil price today was off 1%, while the Brent crude oil price slipped 0.9%.
Are we facing another major customer scandal at a significant U.S. institution? Shares of Comcast Corp. (Nasdaq: CMCSA) were flat today despite news that the cable giant will pay the largest fine ever levied by the Federal Communications Commission to a company in their business. The firm will pay $2.3 million and will face increased oversight from the agency. The crime? The company charged customers for services and equipment that they didn't request.
But the big story today was happening in the smartphone industry. Samsung Electronics Co. Ltd. (OTCMKTS: SSNLF) slashed its operating profit forecast in the third quarter by a stunning 33%. The company continues to reel from a massive recall and production halt for its Galaxy Note 7 device, which had been starting fires. The news helps its primary competitor Apple Inc. (Nasdaq: AAPL). AAPL stock has rallied to its longest streak of daily gains since February 2015. Analysts expect that Samsung's problems will help bolster sales of Apple's iPhone 7 and iPhone 7 Plus. Here at Money Morning, we've been bullish on Apple for a long time. In fact, we put together an Apple Stock Investing Guide that offers a deep dive into who this is one of the best stocks to own.
Top Stock Market News Today, Oct. 12, 2016
- Shares of Amazon.com Inc. (Nasdaq: AMZN) were ticking higher on Wednesday after the company received an upgrade from Cantor Fitzgerald. The investment firm increased its price target from $835 to $1,000 per share. Amazon announced this morning that it will soon unveil a line of convenience stores and curbside pickup locations for groceries. The move is seen as a direct shot at its primary competitor Wal-Mart Stores Inc. (NYSE: WMT). Shares of WMT stock added 0.1%. AMZN stock added 0.3%.
- Twitter Inc. (NYSE: TWTR) isn't dead yet, but the stock is holding on at just above $18 per share. According to various reports, the firm is still in discussion with Salesforce.com Inc. (NYSE: CRM) about a possible deal. Shares of TWTR stock have been in free fall in recent sessions after several other suitors dropped out of the running.
- On the deal front, Stanley Black & Decker Inc. (NYSE: SWK) said it will purchase the tool business of Newell Brands (NYSE: NWL) for roughly $1.95 billion. The all cash and debt deal will close in early 2017. SWK stock gained more than 1.4%, while NWL stock added more than 2%.
- In earnings news, the Barracuda Networks Inc. (Nasdaq: CUDA) stock price soared 13% to a 52-week high after the firm topped quarterly earnings. But there's an even better profit play that we recommend in the growing cybersecurity field, right here.
- Finally, as we head into the final quarter of 2016, savvy investors are looking for an opportunity to find long-term appreciation upside in the markets. Nowhere is there more opportunity to make big money than in the technology sector. Today, we outline the three best technology stocks to buy right now. [Editor's Note: You can read all about them, right here.]
Tuesday's U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- Import and Export Prices at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 30-Year TIPS Announcement at 11 a.m.
- Philadelphia Federal Reserve Bank President Patrick Harker speaks at 12:15 p.m.
- 30-Year Bond Auction at 1 p.m.
- Treasury Budget at 2 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
- Minneapolis Federal Reserve Bank President Neel Kashkari speaks at 9 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.