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The Dow Jones Industrial Average pushed to a three-week low thanks to weakness in Chinese exports and rising expectations that the Federal Reserve will raise interest rates in December.
According to CME Group's FedWatch Tool, the probability of a rate hike in December rose to 70%. The CBOE Volatility Index (VIX) – widely considered the market's fear gauge – rallied by as much as 13% on the day. Investors who are afraid of a possible bear market should read the latest insight from Money Morning Chief Investment Strategist Keith Fitz-Gerald. This afternoon, Fitz-Gerald explained the tools you can use to profit in any market situation.
Let's look at the final numbers on Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,098.94; -45.26; -0.25%
S&P 500: 2,132.55; -6.63; -0.31%
Nasdaq: 5,213.33; -25.69; -0.49%
Now, here's a look at today's most important market events and stocks, plus a preview of Friday's economic calendar.
DJIA Today: Dow Slumps as Rate Hike Speculation Swirls; Oil Gains
The Dow Jones fell 45 points on surprise news that China's exports slumped by 10% in September, while imports declined.
Don't Miss: How to Profit from the Yuan's "Big League" Debut
This morning, U.S. jobless claims hit a 43-year low. The bulk of economists see this news as further proof that the labor market remains very strong. Traders expect that the labor market's resilience will push the Federal Reserve to hike interest rates in December. Here's the latest on the Federal Reserve and the timing of the next rate hike.
The price of crude oil today pushed higher despite a rising U.S. dollar and news that OPEC production had surged to its highest level in eight years. The uptick also happened after the U.S. Energy Information Administration announced its official crude inventory report and marked an end to five straight weeks of inventory declines. The EIA reported a 4.9-million-barrel increase to U.S. inventory levels, topping consensus expectations of a 300,000-barrel gain. What could lead to a price increase on news of higher supply? The EIA reported a large decline in distillates – like heating oil and diesel fuel – and gasoline.
The WTI crude oil price today gained 0.6%, while the Brent crude oil price added 0.5%.
But the big story today was back at Wells Fargo & Co. (NYSE: WFC). The markets are watching the embattled firm after its CEO John Stumpf stepped down last night. The executive has been pressured for weeks to resign due to the firm's massive account scam. The new leader is president and COO Timothy Sloan. Despite the change of guard, the problems plaguing the company's culture still remain. Here's Money Morning Capital Wave Strategist Shah Gilani weighing in on the crisis, right here.
Top Stock Market News Today, Oct. 13, 2016
- Shares of GoPro Inc. (Nasdaq: GPRO) fell another 3.1% after on bad news regarding company sales. According to a report from a Piper Jaffray analyst, the camera maker has not been sending products to Amazon.com Inc. (Nasdaq: AMZN) and won't resume shipments to the e-commerce giant until the end of October. AMZN sells at least 12% of its products.
- Speaking of Amazon, the company's stock traded near record highs on Thursday. Though the Amazon stock price today fell by 0.8%, we anticipate that the stock will only push higher in the months ahead. Here's where AMZN stock is heading next.
- In earnings news, shares of Delta Air Lines Inc. (NYSE: DAL) added roughly 0.9% after the company reported earnings per share (EPS) of $1.70 on revenue of $10.48 billion. The per-share earnings figure topped Wall Street expectations, but revenue fell just short.
- In other earnings news, shares of Marriott Vacations Worldwide Corp. (NYSE: VAC) slumped by more than 10% after the firm reported weaker than expected quarterly revenue. The company reported a big slump in its European business. Meanwhile, Ulta Salon, Cosmetics & Fragrance Inc. (Nasdaq: ULTA) saw its shares surge more than 11.5% after the firm hiked its Q3 and full-year guidance.
- Tomorrow, get ready for fireworks as four major financial firms report quarterly earnings. While JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) both unveil their Q3 reports, the real focus will be on Wells Fargo and its forward guidance given the firm's massive account scandal and the potential of customer attrition.
Tuesday's U.S. Economic Calendar (all times EDT)
- PPI-FD at 8:30 a.m.
- Retail Sales at 8:30 a.m.
- Boston Federal Reserve Bank President Eric Rosengren speaks at 8:30 a.m.
- Business Inventories at 10 a.m.
- Consumer Sentiment at 10 a.m.
- Federal Reserve Bank of Cleveland President Loretta Mester speaks at 12 p.m.
- Federal Reserve Chair Janet Yellen speaks at 12:30 p.m.
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 p.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.