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The Dow Jones Industrial Average hit a new all-time high thanks to a surprise boost in financial stimulus by the European Central Bank (ECB).
This morning, the ECB announced it would maintain interest rates at their current levels and extend its quantitative easing program through December 2017. The central bank said it will maintain its purchasing level at 80 billion euros per month and drop that figure down to a pace of 60 billion euros each month for the duration of the year.
The ECB is attempting to spur economic growth in the world's largest economic bloc.
The Nasdaq and the S&P 500 also rallied thanks to gains in tech stocks and a huge earnings report from Lululemon Athletica Inc. (Nasdaq: LULU).
Let's look at the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,614.81; +65.19; +0.33%
S&P 500: 2,246.19; +4.84; +0.22%
Nasdaq: 5,417.36; +23.59; +0.44%
Now, here's a look at today's most important market events and stocks, plus a preview of Friday's economic calendar.
DJIA Today: Dow Hits New High on ECB Statement, Improved Jobs Market
The Dow Jones hit another record high – adding 65 points – as the Donald Trump market euphoria continues full steam ahead. The combination of increased European stimulus and positive jobs data added fuel to a red-hot market.
It was a light day of economic data, which drew special attention to this morning's announcement on weekly jobless claims. Last week, the number of Americans seeking unemployment benefits retreated from a five-month high.
The markets have almost fully priced in a rate hike during the December FOMC meeting, pushing banking stocks even higher. Shares of Bank of America Corp. (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and Wells Fargo & Co. (NYSE: WFC) all increased by at least 1% on the day. The markets are still looking for clues on Fed's 2017 monetary policy plans and how they will mesh with the fiscal policy plans of the president-elect.
Investors anticipate an economic stimulus should the Republican-controlled government initiate corporate and individual income tax reform within in the first few months of the Trump administration. With the Fed and the Trump administration in focus, be sure to check out our top stocks to buy.
Gold prices fell again on Thursday thanks to a stronger U.S. dollar and expectations for a rate hike next week. Despite the recent downturn in gold prices since the 2016 election, the picture for the precious metal is looking up for 2017. Our latest gold price forecast for 2017 shows that gold prices will grow by double digits within the next few months. Money Morning Resource Specialist Peter Krauth lays out his latest gold price forecast right here.
The WTI crude oil price today ticked back above $50 and finished the day up 2.1%. Meanwhile, Brent crude gained 1.7%, despite increased skepticism that OPEC will be able to follow through on its planned production deal to cut crude output. This week, Money Morning Global Energy Strategist Dr. Kent Moors offered his latest price forecast and explained what will happen next for OPEC as 2017 approaches. Check out his latest insight, right here.
Big news slipping under the radar is President-elect Trump's statements on China. As you might have heard, some economists are concerned that the incoming administration is willing to start a trade war with China. You also might have heard that his recent telephone call with Taiwanese President Tsai Ing-wen was a "gaffe," and one that could stir problems between China's leadership and the United States.
But Money Morning Chief Investment Strategist Keith Fitz-Gerald explains that this was not a "gaffe" and that what Trump is doing is actually a brilliant strategy. Fitz-Gerald has an important message to investors: You can make a lot of money thanks to this major Trump profit play.
Top Stock Market News Today, Dec. 8, 2016
- Shares of Wells Fargo & Co. (NYSE: WFC) were in focus after a U.S. regulator announced the company would receive a failing grade on its community lending test. The Office of the Comptroller of the Currency announced that the "Too Big to Fail" bank "needs to improve its lending under the Community Investment Act," a rule designed to promote loans to poorer neighborhoods across the United States. WFC shares fell 0.2%.
- Shares of United States Steel Corp. (NYSE: X) retreated by 0.6% after a huge boost during Wednesday's trading session. Yesterday, company CEO Mario Longhi announced that his company would aim to rehire up to 10,000 workers who have been laid off over the last few years. Longhi appeared optimistic during an interview with CNBC about the proposed regulatory changes under President-elect Donald Trump.
- Shares of Chipotle Mexican Grill Inc. (NYSE: CMG) added 0.5% as the stock continues to rise from a 52-week low. The stock price tanked on Tuesday after the company questioned its own financial outlook for 2017. Now, you might be tempted to pick up shares with the stock hovering at these low levels. But we lay out the risks and advise investors to steer clear of this struggling restaurant stock.
- In earnings news, shares of Lululemon Athletica Inc. (Nasdaq: LULU) rallied more than 5% after the Canadian apparel maker crushed Wall Street profit expectations. The Lululemon Athletica Inc. stock price is also surging today thanks to an improved outlook and word that the company is on track to hit its five-year revenue targets. Here's more on why LULU stock was surging during today's trading session.
- After the bell, look for earnings reports from Broadcom Ltd. (Nasdaq: AVGO), Restoration Hardware Holdings Inc.(NYSE: RH), Finisar Corp. (Nasdaq: FNSR), and The Cooper Companies (NYSE: COO).
Friday's U.S. Economic Calendar (all times EST)
- Consumer Sentiment at 10 a.m.
- Wholesale Trade at 10 a.m.
- Baker Hughes Rig Count at 1 p.m.
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.