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This morning, the Dow Jones Industrial Average looks as though it is about to snap a seven-day winning streak thanks to a downturn in crude oil prices and markets taking a breath after a historic rally in the wake of the 2016 election.
On Tuesday, the Dow added another 54 points thanks to a rally in energy stocks and utility stocks. The S&P 500 energy sector added 2.5%, while utilities gained more than 1.6%. The technology sector also received a big boost after another big day from FANG stocks.
Let's take a look at Tuesday's stock market numbers:
Dow Jones: 18,923.06; 54.37; 0.29%
S&P 500: 2,180.39; 16.19; 0.75%
Nasdaq: 5,275.62; 57.23; 1.10%
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 64-point decline in pre-market hours as investors eye a fresh round of economic data and speeches by members of the Federal Reserve. With the post-election rally coming to a close, investors should consider the best stocks to buy now. [Editor's Note: Money Morning breaks down the top stocks to own in today's market environment, right here.]
The price of oil fell again thanks to a rising U.S. dollar and an uptick in U.S. crude inventories. Investors are eyeing today's report from the U.S. Energy Information Administration on domestic crude stocks. Analysts project that inventories increased by 1.1 million barrels last week. That report comes a day after the American Petroleum Institute announced that inventories increased last week by 3.7 million barrels.
The downturn comes despite a report by the International Energy Agency that it does not anticipate that crude demand will slow down before 2040. Nations bound by the Paris climate change summit had hoped to reduce carbon emissions, but the IEA points out that there are very few alternatives to crude oil in the critical global trade industries of road freight, aviation, and petrochemicals.
The WTI crude oil price today dipped 1.1%, while the Brent crude oil price dipped 0.9%.
But the big news this morning is the Snapchat IPO. Snap Inc., the parent company of the digital application, filed for an initial public offering under the condition of confidentiality. Bloomberg reports that the firm filed for its IPO before the election with the Securities and Exchange Commission and set a potential valuation between $20 billion and $25 billion.
Before Snapchat goes public, check out this guide we've prepared potential investors. Money Morning explains how Snapchat makes money, how the application works, the differences between Snapchat and rival Instagram, and an update on when the firm will go public. Be sure to check out "Your Snapchat Stock Guide Before Snap Goes Public."
Stocks to Watch Today, Nov. 16, 2016
- Shares of the Walt Disney Co. (NYSE: DIS) are generating buzz after global entertainment company received an upgrade from German investment firm Deutsche Bank AG (USA) (NYSE: DB). The firm upgraded DIS stock from a "Hold" rating to a "Buy" with a price target of $112 per share. DB says it anticipated that Disney will hit double-digit earnings growth again by 2018.
- Microsoft Corp. (Nasdaq: MSFT) told European Union antitrust leaders that it will make concessions over its proposed $26 billion takeover social network LinkedIn Corp. (Nasdaq: LNKD). The commission will offer a ruling on the deal on Dec. 6.
- In earnings news, Target Corp. (NYSE: TGT) rallied more than 8.4% this morning after the firm easily topped Wall Street earnings expectations for the third quarter. In addition to topping profit and revenue expectations, the company increased its earnings guidance and same-store sales forecast looking forward.
- Meanwhile, shares of Lowe's Companies Inc. (NYSE: LOW) fell 3.9% after the home improvement retailer fell short of both top- and bottom-line earnings expectations. The firm's Q3 adjusted EPS of $0.88 fell short of Wall Street expectations by $0.08. Although the firm reported an uptick in same-store sales, its executives warned that it may fall short of its previous forward guidance in the current quarter. The news comes a day after Home Depot Inc. (NYSE: HD) topped Wall Street earnings. HD stock was off 0.3% this morning.
- Look for additional earnings reports from NetApp Inc. (Nasdaq: NTAP), L Brands Inc. (NYSE: LB), Brady Corp. (NYSE: BRC), OYO Geospace Corp. (Nasdaq: GEOS), Meritor Inc. (Nasdaq: MTOR), and WGL Holdings (NYSE: WGL).
Today's U.S. Economic Calendar (all times EST)
- St. Louis Federal Reserve Bank President James Bullard speaks at 3 a.m.
- MBA Mortgage Applications at 7 a.m.
- Minneapolis Federal Reserve Bank President Neel Kashkari speaks at 7:30 a.m.
- PPI-FD at 8:30 a.m.
- Industrial Production at 9:15 a.m.
- Atlanta Fed Business Inflation Expectations at 10 a.m.
- Housing Market Index at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Treasury International Capital at 4 p.m.
- Philadelphia Federal Reserve Bank President Patrick Harker speaks at 5:30 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.