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The Dow Jones Industrial Average is surging in premarket trading on Tuesday as investors aim to start 2017 with a triple-digit bang.
Dow futures have pushed the index back into striking distance of 20,000. Oil prices were rallying thanks to increased confidence that OPEC producers will cap excessive supply on the global markets. On the international front, markets were also rallying thanks to improvements in China's manufacturing sector.
On Friday, the Dow shed 57 points as a brief sell-off rattled the markets in the closing days of 2016. Investors may have been selling stocks to reap the benefits of tax harvesting after a huge post-election rally.
Let's look at the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,762.60 -57.18 (-0.29%)
S&P 500: 2,238.83 -10.43 (-0.46%)
Nasdaq: 5,383.12 -48.97 (-0.90%)
Here's a look at today's most important market events and stocks, plus a look at Tuesday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow projected a 132-point gain thanks to a big jump in crude oil prices. In addition, the banking sector continues to rally on increased optimism of a hawkish Federal Reserve and a business-friendly President-elect Donald Trump. This morning, shares of Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), Goldman Sachs Group (NYSE: GS) and Wells Fargo & Co. (NYSE: WFC) were all up at least 1% after the companies received upgraded price targets from Barclays Plc (NYSE: BCS).
Investors were cheering a big rise in the Chinese manufacturing sector. The China Caixin manufacturing purchasing managers' index increased from 50.9 in November to 51.9 in December. That is the largest jump in the index since January 2013 and has investors and analysts optimistic that China's economy is pulling itself out of a lull.
Crude oil prices were surging this morning to an 18-month high after OPEC and non-OPEC producers coordinated to cut excessive production. One month after the global oil cartel agreed to cap production levels, the nations are on the verge of dramatically reducing oversupply. OPEC and 11 non-OPEC nations agreed to cut production by 1.8 million barrels per day (bpd).
The WTI crude oil price today was up 2.2%, while Brent crude added roughly 2.3%.
But the big news today is Bitcoin...
The electronic currency has been on a huge tear over the last year and breached the $1,000.00 mark on Monday. That is the highest level for Bitcoin in more than three years. In fact, in 2016, Bitcoin was one of the top investments and trailed only two stocks on the S&P 500.
Stocks to Watch Today, Jan. 3, 2017
- Shares of General Motors Inc. (NYSE: GM) were off in premarket hours after President-elect Donald Trump blasted the company over its outsourcing operations. Trump demanded that the company produce its Chevrolet Cruz in the U.S. or face a tax at the border. This is the latest example of how Trump's Twitter rants can fuel a sell-off in stocks. Money Morning Chief Investment Strategist Keith Fitz-Gerald has developed a strategy for investors to take advantage of buying opportunities created by Trump's Twitter tantrums. Check out how you can make big money in 2017 by using this new, power investment strategy.
- Shares of Xerox Corp. (NYSE: XRX) rallied more than 8.6% after the firm received an upgrade from JPMorgan Chase. The investment bank rated the stock "overweight" and anticipated a strong return from its spin-off of its Conduent business.
- Shares of Twitter Inc. (NYSE: TWTR) are in focus after another executive called it quits at the micro-blogging company. Kathy Chen, the executive who ran the company's Chinese division, has quit after just eight months on the job. Even more fitting, the executive sent a Tweet out marking her decision to depart from the company. Twitter is blocked in China, a rule that has been in place since 2009.
Today's U.S. Economic Calendar (all times EST)
- PMI Manufacturing Index at 9:45 a.m.
- ISM Manufacturing Index at 10 a.m.
- Construction Spending at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- 3-Month Bill Auction at 11:30 a.m.
- 6-Month Bill Auction at 11:30 a.m.
- 52-Week Bill Auction at 11:30 a.m.
- Gallup US ECI at 2 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.