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This morning, the Dow Jones Industrial Average was sliding again in pre-market hours as investors eye another round of earnings reports, new polls indicating a significant swing in voter sentiment in the 2016 election, and another monetary policy update from the Federal Reserve.
With so much uncertainty on tap, many investors are wondering if the next stock market crash is coming soon.
On Tuesday, the Dow dropped 105 points with the 2016 election in focus. The CBOE Volatility Index (VIX) – commonly referred to as the markets' fear gauge – surged 13.4% to 19.3.
Tuesday's Stock Market Numbers:
Dow Jones: 18,037.17; -105.25; -0.58%
S&P 500: 2,111.72; -14.43; -0.68%
Nasdaq: 5,153.58; -35.56; -0.69%
Now, here's a look at today's most important market events and stocks, plus a look at Wednesday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 27-point decline after the Los Angeles Times reported that Republican nominee Donald Trump has opened up a lead in a national poll. Reuters polling showed that Clinton held the lead on Monday, but a sudden decision by the FBI to dig into newly discovered emails has thrown the race back into chaos. With so much uncertainty ahead of the election, gold prices are pushing higher. Gold prices added 0.8% this morning and are hovering back near the $1,300 level.
Meanwhile, it's a busy week of economic data, headlined by the November employment report. The Labor Department will release the unemployment report on Friday. This morning, ADP released its monthly labor report for the private sector, and U.S. hiring cooled more than expected. Private companies added 147,000 positions in October, far short of the 165,000 expected by economists.
The price of crude oil today is falling after the American Petroleum Institute reported a surprise increase in U.S. crude inventories. The surprise increase in supply adds to existing negative sentiment on the status of the OPEC deal to cut production. Money Morning Global Energy Strategist Dr. Kent Moors explains there is a significant development in the geopolitics of oil that investors must know about right away. As he explains, a surprising rumor has OPEC scrambling, and it could unleash the next major wave of energy profits in the months and years ahead.
The WTI crude oil price today fell 1.4%, while the Brent crude oil price dipped 1.2%.
But the big story in pre-market hours is the Federal Reserve. America's favorite band of academic speculators will conclude their seventh meeting on monetary policy of the year. The Federal Reserve is not expected to raise interest rates until December, but eight years of monetary experimentation have the markets and the economy on edge. Money Morning Capital Wave Strategist Shah Gilani explains that the Fed's continued intrusion into the global economy isn't going to end well. Here's what you need to know and how you must protect yourself.
Stocks to Watch Today, Nov. 2, 2016
- Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) rallied more than 33% after a short squeeze went into effect. Shares are sliding again in pre-market hours as investors are increasingly aware of the downside pressure ahead of the company's Nov. 8 earnings report. Here's everything you need to know about VRX and the company's latest scandal.
- In deal news, consolidation in the semiconductor industry continues to accelerate. This morning, Broadcom Ltd. (Nasdaq: AVGO) announced that it will purchase network gear manufacturer Brocade Communications Systems Inc. (Nasdaq: BRCD) for $5.5 billion in cash. Shares of BRCD surged more than 9% in pre-market hours.
- In earnings news, shares of Alibaba Group Holding Ltd. (NYSE: BABA) added 3.8% after the company topped Wall Street projections. On Tuesday, we broke down the numbers for BABA stock and the company's quarterly earnings report. Check it out, right here.
- Meanwhile, shares of Time Warner Inc. (NYSE: TWX) gained 1.4% after the global media giant topped Wall Street earnings expectations. The firm crushed profit forecasts, reporting an earnings per share (EPS) figure of $1.83. Analysts expected an EPS of $1.36. The company also topped revenue expectations by a comfortable margin thanks to strong sales from its latest film, "Suicide Squad."
- Of all the companies reporting earnings on Wednesday, expect Facebook Inc. (Nasdaq: FB) to generate the most buzz. Shareholders expect a strong Q3 Facebook earnings report as the company continues to rally thanks to high advertising revenue. Money Morning has put together this report on what you can expect from today's big announcement.
- Look for additional earnings reports from Qualcomm Inc. (Nasdaq: QCOM), Fitbit Inc. (NYSE: FIT), Yelp Inc. (NYSE: YELP), Whole Foods Market (Nasdaq: WFM), Wynn Resorts Ltd. (Nasdaq: WYNN), First Solar Inc. (Nasdaq: FLSR), Transocean Inc. (NYSE: RIG), Allergan Plc. (NYSE: AGN), Marathon Oil Corp. (NYSE: MRO), and IAC InterActiveCorp. (NYSE: IAC).
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Treasury Refunding Announcement at 8:30 a.m.
- 3-Year Note Announcement at 8:30 a.m.
- 10-Year Note Announcement at 8:30 a.m.
- 30-Year Bond Announcement at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- FOMC Meeting Announcement at 2 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.