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Investors are digesting a statement from New York Fed President William Dudley and reacting to Friday's big announcement that the U.S. unemployment rate has fallen to its lowest level in roughly a decade.
Populism reared its head again Sunday after Italians voted "no" on a referendum that would have allowed the government to reform the nation's constitution. Italian Prime Minister Matteo Renzi announced yesterday that he will meet with his cabinet and resign Monday.
On Friday, the Dow fell despite news that the U.S. economy added 179,000 jobs in November. The official unemployment rate also fell from 4.9% to 4.6%. The sharp decline in joblessness all but ensures that the Federal Reserve will raise interest rates during the December FOMC meeting.
Let's look at the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,170.42; -21.51; -0.11%
S&P 500: 2,191.95; +0.87; +0.04%
Nasdaq: 5,255.65; +4.55; +0.09%
Here's a look at today's most important market events and stocks, plus a look at Monday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 77-point gain after William Dudley said that the United States will see gradual interest rate hikes should the economy continue its positive streak. Meanwhile, the prospect of greater instability in the Eurozone and its third-largest economy fueled a 1% slide in the euro.
Sunday's Quitaly vote for constitutional reform could be the most significant European political event of 2016. This new development is another threat to the European Union. The Italian vote was especially worrisome to the European banking and financial sector.
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 for investors in the weeks ahead. Fitz-Gerald lays out his three-part strategy on how to handle the Italian referendum vote. Check it out, right here.
Oil prices were rallying again Monday as investors continue to show optimism over OPEC's effort to cap excessive production. The WTI crude oil price today added 0.9%, while the Brent crude oil price increased by 0.9%. It is the first time that Brent crude has topped $55.00 per barrel in roughly 16 months.
Money Morning Global Energy Strategist Dr. Kent Moors explains that the global oil cartel must now enforce the agreement. With so many members looking out for their own economies, it could be a rocky road. But Moors offers a reason – one reason – for optimism. Here's why the OPEC deal could succeed and push crude prices even higher.
Stocks to Watch Today, Dec. 5, 2016
- Investors will be keeping an eye on AT&T Corp. (NYSE: T) and Time Warner Inc. (NYSE: TWX) this week. On Wednesday, the two companies will go before Congress to defend their $85 billion mega-merger before the U.S. Senate antitrust subcommittee.
- Shares of L Brands (NYSE: LB) are in focus as investors prepare for the annual Victoria's Secret Fashion Show.
- Shares of Coach Inc. (NYSE: COH) are in focus after the Financial Times said that the apparel company tried and failed several times to purchase British luxury fashion brand Burberry. The British firm rejected several bids for a deal that would have created a new company with a market capitalization of roughly $20 billion.
- Barron's named its favorite stocks of 2017 over the weekend. The list is comprised of Alphabet Inc. (Nasdaq: GOOGL), Apple Inc. (Nasdaq: AAPL), Citigroup Inc. (NYSE: C), Delta Air Lines (NYSE: DAL), Deutsche Telekom AG (OTCMKTS ADR: DTEGY), Merck & Co. Inc. (NYSE: MRK), Novartis AG (NYSE ADR: NVS), Toll Brothers Inc. NYSE: TOL), Unilever Plc. (NYSE ADR: UL), and Walt Disney Co. (NYSE: DIS). The publication said that these stocks have lagged the market in 2016 and their valuations are attractive. Just because these stocks were struggling this year, however, doesn't mean they'll do any better in 2017. That's why we have our own list of Stocks to Buy for 2017. Our list of stocks is poised to soar thanks to a major policy change expected by President-elect Donald Trump. Read our list, right here.
- No major U.S. companies report quarterly earnings Monday.
Today's U.S. Economic Calendar (all times EST)
- Gallup U.S. Consumer Spending Measure at 8:30 a.m.
- New York Federal Reserve President William Dudley speaks at 8:30 a.m.
- Chicago Federal Reserve Bank President Charles Evans speaks at 9:25 a.m.
- PMI Services Index at 9:45 a.m.
- ISM Non-Manufacturing Index at 10 a.m.
- Labor Market Conditions Index at 10 a.m.
- Four-Week Bill Announcement at 11 a.m.
- Three-Month Bill Auction at 11:30 a.m.
- Six-Month Bill Auction at 11:30 a.m.
- TD Ameritrade IMX at 12:30 p.m.
- St. Louis Federal Reserve Bank President James Bullard speaks at 2:05 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.