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This morning, the Dow Jones Industrial Average is flat in pre-market hours as investors prepare for a busy schedule of speeches from members of the Federal Reserve.
On Thursday, the Dow added 35 points thanks to a strong surge in financial stocks. The banking sector rallied after Federal Reserve Chair Janet Yellen hinted that the central bank will likely move on interest rates in the near future. The markets also benefited from positive economic data and signs that U.S. labor markets are tightening.
Let's take a look at Thursday's stock market numbers:
Dow Jones: 18,903.82 +35.68 (0.19%)
S&P 500: 2,187.12 +10.18 (0.47%)
Nasdaq: 5,333.97 +39.39 (0.74%)
Now, here's a look at today's most important market events and stocks, plus a look at Friday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average is projecting small losses as investors prepare for a busy day of speeches and digest a slight uptick in oil prices. Markets reacted positively to Fed Chair Janet Yellen's statement before Congress on Thursday. Yellen said that improving economic data would justify an increase in benchmark interest rates "soon." According to CME Group's FedWatch Tool, the probability of a rate hike in December now sits higher than 90%.
Investors also continue to show positive sentiment over the upcoming presidency of Donald Trump. Tax reform, reduced bureaucracy, and streamlined government could be a big boon for business here in the United States. Money Morning Executive Editor Bill Patalon explains that the next four years could be very profitable to investors. How profitable? Just see for yourself.
The price of oil gained in early trading as markets show increased optimism that OPEC will strike a deal to cap production. Markets cheered progress on Thursday when the Saudi Arabian oil minister predicted that the global oil cartel would bind itself to the framework that OPEC countries developed during its September meeting. OPEC plans to meet in Vienna, Austria, on Nov. 30.
The WTI crude oil price today gained 0.3%, while the Brent crude oil price gained 0.5%.
But the big news this morning is happening at Tesla Motors Inc. (Nasdaq: TSLA). On Thursday afternoon shareholders of both Tesla and SolarCity Corp. (Nasdaq: SCTY) voted overwhelmingly to approve a merger between the two organizations. At least 85% of shareholders agreed to the deal, which now sets up the opportunity for Elon Musk to create what he calls "the world's largest sustainable energy company." The deal did face criticism. Some opponents called the deal a "thinly veiled" bailout for SolarCity, which has spent a huge amount of cash and seen its stock fall significantly in 2016.
Stocks to Watch Today, Nov. 18, 2016
- Shares of Western Refining (NYSE: WNR) continues to tick up after the company announced it will sell itself to Tesoro Corp. (NYSE: TSO) for $4.1 billion. On Thursday, WNR stock rallied more than 23%.
- Shares of LinkedIn Corp. (Nasdaq: LNKD) are in focus after Russia's telecommunications agency announced that it has blocked the social network. According to reports, the company has been in violation of a data privacy law that was enacted by Russian leaders in 2015. The stock has largely been unaffected, as investors are more interested in Microsoft Corp.'s (Nasdaq: MSFT) ongoing dialogue with European leaders over concessions tied to its pending acquisition of LinkedIn. However, Russia's announcement has some speculating that the communications minister may move to block other companies that have violated the privacy rules, including Alphabet Inc. (Nasdaq: GOOGL), Facebook Inc. (Nasdaq: FB), and Twitter Inc. (NYSE: TWTR). LNKD stock was flat in pre-market hours.
- In earnings news, Abercrombie & Fitch Co. (NYSE: ANF) stock plunged more than 10% after the company fell well short of top- and bottom-line earnings estimates. The company reported a big decline in same-store sales and continued to struggle in its effort to rebrand. Seasonal sales fell well short of Wall Street expectations.
- Meanwhile, shares of Salesforce.com Inc. (NYSE: CRM) rallied more than 6.4% after the company topped Wall Street earnings expectations after the bell on Thursday. The company reported a 25% jump in revenue, a boost fueled by huge gains in sales of cloud-based services and marketing software.
- Look for additional earnings reports from Foot Locker Inc. (NYSE: FL), Hibbett Sports (Nasdaq: HIBB), Destination XL Group (Nasdaq: DXLG) and Buckle Inc. (NYSE: BKE).
Today's U.S. Economic Calendar (all times EST)
- Louis Federal Reserve Bank President James Bullard speaks at 5:30 a.m.
- Kansas City Federal Reserve Bank President Esther George speaks at 9:30 a.m.
- William Dudley speaks at 9:35 a.m.
- Leading Indicators at 10 a.m.
- Kansas City Fed Manufacturing Index AT 11 a.m.
- Baker Hughes Rig Count at 1 p.m.
- Dallas Federal Reserve Bank President Robert Kaplan speaks at 1:30 p.m.
- Federal Reserve Board Governor Jerome Powell speaks at 9:45 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.