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The Dow Jones Industrial Average is dipping this morning after the November jobs report drove investors to speculate on the timing of the next interest rate hike by the Federal Reserve.
This morning, the U.S. Labor Department announced that the U.S. economy added 179,000 jobs in November, while the official unemployment rate fell from 4.9% to 4.6%.
On Thursday, the Dow Jones gained 68 points as investors digested a mixed round of economic data and cheered a huge day for the automotive sector. Retail stocks struggled after a bad series of earnings reports, but energy stocks rallied higher thanks to a rally in oil prices.
Dow Jones: 19,191.93; 68.35; +0.36%
S&P 500: 2,191.08; -7.73; -0.35%
Nasdaq: 5,251.11; -72.57; -1.36%
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 projected a 17-point decline after the Labor Department issued the November jobs report.
While the unemployment rate is generating all the headlines here in the United States, there's an even bigger event transpiring in Europe. On Sunday, Italian voters will head to the polls to decide whether they wish to grant their prime minister powers to usher in badly needed financial reforms. A "No" vote could paralyze the nation and hold Italy in violation of European Unions rules.
How will the Italians vote this weekend, particularly in the wake of surprise election results in the United States and the "Yes" vote for Britain's departure from the world's largest European Union? That remains unknown right now. What really does matter is how investors plan to reduce their exposure to any potential volatility that might erupt after this referendum.
Money Morning Chief Investment Strategist Keith Fitz-Gerald breaks down how populism is sweeping across Europe and the ramifications for investors. More important, these changes could be extremely profitable to investors in the weeks ahead. Fitz-Gerald lays out his three-part strategy for the Italy vote. Check it out, right here.
The slight downturn comes after a huge announcement at the November OPEC meeting. On Wednesday, OPEC announced it had secured a deal with Russia to reduce output to support crude oil prices. The most important component of the deal was Saudi Arabia's willingness to slash its own production to encourage its rival Iran to take part in the deal. The decision to cut production by Saudi Arabia is seen as a big gamble for the nation as it hopes that higher oil prices will help drive economic diversification.
The global oil cartel has a big challenge ahead of the next OPEC meeting in January 2017. The global oil cartel must now enforce the agreement. With so many members looking out for their economies, it could be a rocky road.
Money Morning Global Energy Strategist Dr. Kent Moors explains that there is one thing that can hold OPEC's production deal in place. And it could be a big force for energy investors. Here's the reason why the OPEC deal could succeed and push crude prices higher.
Stocks to Watch Today, Dec. 2, 2016
- In a corporate shocker, Starbucks Corp. (Nasdaq: SBUX) CEO Howard Schultz has announced that he will step down from his role in 2017. However, the popular and outspoken leader plans to stay on as the company's executive chairman. The company's COO Kevin Johnson will place Schultz. Shares of SBUX fell more than 3% after the announcement on Thursday afternoon.
- Shares of Amazon.com Inc. (Nasdaq: AMZN) are generating buzz this morning on news that the company captured a staggering 31% of online spending during Cyber Weekend. The firm easily beat its rivals Best Buy Corp. (NYSE: BBY), Target Corp. (NYSE: TGT), and Wal-Mart Stores Inc. (NYSE: WMT), as all three rivals failed to capture more than 7.4% each. Over the last year, Amazon has generated more than $86 billion in online sales, according to eMarketer. The next closest performance comes from Apple Inc. (Nasdaq: AAPL), which registered a modest $15.4 billion in comparison to Amazon.
- In earnings news, shares of Ambarella Inc. (Nasdaq: AMBA) fell more than 5% in pre-market hours despite news that the technology firm easily topped Wall Street earnings expectations. The company reported an EPS of $1.11 on top of $100.49 million in revenue. That surpassed consensus analyst expectations of $0.94 on top of $96.69 million. The stock was sliding after it projected soft holiday sales of hardware made by GoPro Inc. (Nasdaq: GPRO), the semiconductor giant's primary client.
- Look for additional earnings reports from Big Lots Inc. (NYSE: BIG) and Fred's Inc. (Nasdaq: FRED).
Today's U.S. Economic Calendar (all times EST)
- Employment Situation at 8:30 a.m.
- Federal Reserve Gov. Lael Brainard speaks at 8:45 a.m.
- Federal Reserve Gov. Daniel Tarullo speaks at 12:30 p.m.
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 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.