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This morning, the Dow Jones Industrial Average is flat as investors eye the U.S. Federal Reserve and oil prices push higher. Markets are facing a very busy day of economic data after a somewhat lackluster morning for the global markets.
On Wednesday, the Dow slipped 54 points as investors listened to statements from various members of the Fed and confirmed their suspicions that the central bank will finally hike interest rates next month for the first time since December 2015.
Let's take a look at Wednesday's stock market numbers:
Dow Jones: 18,868.14; -54.92; -0.29%
S&P 500: 2,176.94; -3.45; -0.16%
Nasdaq: 5,294.58; +18.96; 0.36%
Now, here's a look at today's most important market events and stocks, plus a look at Thursday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a one-point gain as investors weighed another round of earnings reports and a statement by Federal Reserve Chair Janet Yellen suggesting that the central bank may raise interest rates very soon. Although a rate hike next month would likely be small, it would be another step toward normalization of interest rates after a decade of the Fed's zero-interest-rate policy (ZIRP).
The price of oil gained on increased optimism over the OPEC production deal. This morning, Saudi Energy Minister Khalid al-Falih said he expects that the global oil cartel will be able to expand on its production deal that it reached in September. OPEC will meet in Algeria later this month to discuss how the cartel might be able to court non-cartel members to join the cause in order to cap production and support crude prices. The increased optimism offset concerns about a building supply glut and rising crude inventories in the United States. On Wednesday, the U.S. Energy Information Administration announced that crude stocks increased by 5.3 million barrels last week, easily topping analyst expectations of a 1.5 million barrel build.
The WTI crude oil price today gained 1.3%, while the Brent crude oil price gained 1.4%.
But the big news this morning is happening with the Federal Reserve. On Thursday, Federal Reserve Chair Janet Yellen said that the central bank could raise interest rates very soon if economic data continues to show improvements in the jobs market and rising inflation. Yellen said that the economy still has a bit of room to run before the Fed is totally confident that inflation will meet the bank's target.
The Fed's next and final meeting of 2016 will happen in December. According to CME Group's FedWatch Tool, the probability of a rate hike in December sits at 90%.
Stocks to Watch Today, Nov. 17, 2016
- Shares of First Solar Inc. (Nasdaq: FSLR) cratered more than 12% after the company announced plans to slash 1,600 jobs, more than 25% of their employees. The company will also shift its operations to newer solar modules. Analysts expect that the firm will make a number of changes to its operations at a time that alternative energy stocks are under pressure.
- Shares of Netflix Inc. (Nasdaq: NFLX) were ticking upward this morning after a difficult five-day stretch for the digital streaming giant. Here's the latest on why NFLX stock has been sliding over the last few sessions and where we see the stock heading next.
- In earnings news, Wal-Mart Stores Inc. (NYSE: WMT) fell 3% after the company fell short of Wall Street earnings expectations. The firm would have likely topped earnings estimates, but the firm said that falling food prices impacted its bottom line. The company reported an EPS of $0.98 on top of $118.18 billion in revenue. Wall Street expected an EPS of $0.97 on top of $118.52 billion in revenue.
- Meanwhile, shares of Best Buy Co. Inc. (NYSE: BBY) surged 5.5% after the big box retailer easily topped analyst expectations. The firm reported an EPS of $0.62 on top of $8.94 billion. Wall Street expected an EPS of $0.47 on top of $8.84 billion. The company also said that U.S. same-store sales increased by 1.8%.
- Look for additional earnings reports from Salesforce.com Inc. (NYSE: CRM), Gap Inc. (NYSE: GPS), Intuit Inc. (Nasdaq: INTU), Marvell Technology Group Ltd. (Nasdaq: MRVL), Ross Stores Inc. (NYSE: ROST), Applied Materials (Nasdaq: AMAT), and The J.M. Smucker Co. (NYSE: SJM).
Today's U.S. Economic Calendar (all times EST)
- Consumer Price Index at 8:30 a.m.
- Housing Starts at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Philadelphia Fed Business Outlook Survey at 8:30 a.m.
- New York Federal Reserve Bank President William Dudley speaks at 9:10 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Federal Reserve Chair Janet Yellen speaks at 10 a.m.
- E-Commerce Retail Sales at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 5-Year Note Announcement at 11 a.m.
- 7-Year Note Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 2-Year FRN Note Announcement at 11 a.m.
- Two-Year Note Announcement at 11 a.m.
- Federal Reserve Governor Lael Brainard speaks at 12:30 p.m.
- 10-Year TIPS Auction at 1 p.m.
- Chicago Federal Reserve President Charles Evans speaks at 2:45 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 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.