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The Dow Jones Industrial Average pushed higher as markets bet on Hillary Clinton to win the 2016 presidential election. Wall Street anticipates that Clinton would provide greater stability for the markets. According to FiveThirtyEight, Clinton has a 71.4% chance of winning today.
If Clinton wins, it likely will not be by a landslide. The CBOE Volatility Index (VIX) – commonly known as Wall Street's "fear index" – fell 0.5%. The slight downturn in the VIX comes a day after the largest single-day decline in volatility since June.
Let's look at the final numbers Tuesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,332.50; 72.90; 0.40%
S&P 500: 2,139.54; 8.02; 0.38%
Nasdaq: 5,193.49; 27.32; 0.53%
Now, here's a look at today's most important market events and stocks, plus a preview of Wednesday's economic calendar.
DJIA Today: Investors Await Tonight's Election Results
The Dow Jones gained 72 points as investors placed their bets on Hillary Clinton winning the U.S. election. The news came on the same day that the U.S. Labor Department announced that the number of Americans quitting their jobs hit a 15-year high in September. Many economists see this as a sign that leverage in the U.S. economy has flipped toward employees, which could fuel increased wage growth in the months ahead.
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While everyone is fretting over the election, the timing of the next interest rate hike has slid under the radar. This morning, Chicago Federal Reserve Bank President Charles Evans raised his concerns that inflation is not ticking up toward the central bank's 2% goal. In a speech at the Council on Foreign Relations, Evans said that lower inflation remains "one of the larger risks" facing the central bank.
The price of crude oil was flat during the election-day session. Dr. Kent Moors, Money Morning's Global Energy Strategist, notes that the oil market is currently seeing a high level of volatility because of the election. The crude oil volatility index is hovering near its highest level since September. Here's Moors' latest insight on crude prices and today's big election.
The WTI crude oil price today was flat, while the Brent crude oil price fell 0.4%.
Of course, the big news today is the news of tomorrow. We have to be honest about the state of the U.S. markets. Money Morning Global Credit Strategist Michael Lewitt explains that almost every individual and institution touched by this election has been brought to their knees – the media, Justice Department, FBI, the candidates, their surrogates and supporters, both political parties, and those holding high office. Lewitt explains that the markets cannot handle either candidate right now. And that's why he recommends that you take this position starting now.
Top Stock Market News Today, Nov. 8, 2016
- With optimism over a Clinton presidency, one sector was surging on Tuesday: The firearms business. Shares of Sturm Ruger & Co. Inc. (NYSE: RGR) added 1.1%, while shares of Smith & Wesson Holding Corp. (Nasdaq: SWHC) gained more than 2.2%. Many anticipate that gun sales will surge should Clinton get elected. The candidate has called for increased background checks, limitations on sales of certain weapons, and other forms of regulation.
- Valeant Pharmaceuticals International Inc. (NYSE: VRX) stock cratered another 8.2% this morning to a 52-week low after the Canadian pharmaceutical firm fell well short of Wall Street earnings expectations. VRX stock fell to its lowest level since 2010 after the firm slashed its full-year outlook and reported an EPS of $1.55. Wall Street expected an EPS of $1.78. Many investment titans continue to bleed cash after doubling and even tripling down on this failing company, but Michael Lewitt has long argued that Valeant is hurling toward bankruptcy. We recommend that investors avoid the stock at all costs.
- In earnings news, Hertz Global Holdings Inc. (NYSE: HTZ) plunged a staggering 49.3% after the global car-rental company fell well short of earnings expectations and slashed its forward outlook. Hertz has been pummeled by increased competition from ride-sharing services like Uber and Lyft.
- CVS Caremark Corp. (NYSE: CVS) cratered 11.6% despite news that it topped Q3 earnings. The firm said that revenue increased by 15% compared to the same period last year. Company earnings increased by 22%. However, the stock slumped after the company slashed its 2016 adjusted earnings forecast. The company raised new concerns about prescription growth and changes by healthcare companies that will migrate away from their pharmacies in the fourth quarter. Shares of Walgreens Boots Alliance Inc. (Nasdaq: WBA) fell 1.8% on the news.
- After the bell, look for additional earnings reports from TripAdvisor Inc. (Nasdaq: TRIP), Jazz Pharmaceuticals Plc. (Nasdaq: JAZZ), Amdocs Ltd. (NYSE: DOX), Copa Holdings SA (NYSE: CPA), and Wayfair Inc. (NYSE: W).
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- Wholesale Trade at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 10-Year Note Auction at 1 p.m.
- Minneapolis Federal Reserve Bank President Neel Kashkari speaks at 1:30 p.m.
- San Francisco Fed Bank President John Williams 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.