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The Dow Jones Industrial Average today is back within striking distance of 20,000 as investors prepare for the release of the minutes from the Fed Open Market Committee's meeting in December.
Investors will be looking for clues into the timing of the next interest rate hike by the U.S. central bank. The markets are also interested to see what the members of the Federal Reserve have to say about the incoming Trump administration and its planned fiscal policies.
On Tuesday, the Dow gained 119 points thanks to a strong uptick in telecom stocks. Shares of Verizon Communications Inc. (NYSE: VZ) offered the biggest boost to the index. The U.S. dollar hit a 14-year high after another round of strong economic data. The Dow came within 60 points of the psychological barrier of 20,000 but fell short after a surprise sell-off in crude oil.
Let's look at the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,881.76; +119.16; +0.60%
S&P 500: 2,257.83; +19.00; +0.85%
Nasdaq: 5,429.08; +45.97; +0.85%
Here's a look at today's most important market events and stocks, plus a look at Wednesday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones industrial average projected a 32-point gain ahead of a very busy day of economic news. In addition to the release of minutes from the Federal Reserve, investors will digest the weekly update on Americans seeking unemployment benefits during the final week of 2016. The report will be a preview of Friday's release of the official December unemployment rate by the U.S. Labor Department.
Crude oil prices were back on the rise Wednesday thanks to an expected decline in domestic inventory levels. The Energy Information Administration doesn't report the official inventory levels until Thursday, but analysts are expecting a decline of 1.7 million barrels.
The WTI crude oil price today was up 0.7%,
Meanwhile, Brent crude added roughly 0.7% as traders eye the ongoing deal among OPEC producers to cap excessive supply. On Wednesday morning, Kuwait raised its expectations that OPEC and 11 non-member nations will comply with the deal.
But the big story is President-elect Donald Trump's ongoing efforts to fill his cabinet and key agency roles within the administration. The Wall Street Journal speculates that Jay Clayton is the early favorite to assume the top role of the Securities and Exchange Commission.
Clayton is a partner at law firm Sullivan & Cromwell. He has specialized in mergers and public and private offerings during his decades of experience.
Stocks to Watch Today, Jan. 4, 2017
- It will be a busy day for auto stocks as companies report domestic sales for the calendar year. Analysts expect that vehicle sales declined in December to an annualized rate of 17.70 million units. Expect heavy trading volumes for General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F), and Fiat Chrysler Automobiles NV (NYSE: FCAU).
- In deal news, shares of Depomed Inc. (Nasdaq: DEPO) rallied more than 12% Tuesday on news that private equity firm KKR & Co. (NYSE: KKR) is still considering a deal to purchase the drug manufacturer. The deal was reported first by the New York Post. Shares added another 3.2% in premarket hours.
- Shares of Tesla Motors Inc. (Nasdaq: TSLA) fell more than 2% in premarket hours after the company announced that it fell short of its delivery targets in the fourth quarter. The firm announced that it delivered 22,000 vehicles during the quarter, short of the 25,000 it forecasted in 2016. Despite falling short of its goals, the company increased its annual production by 64% compared to its output in 2015.
- Shares of Exxon Mobil Corp. (NYSE: XOM) are in focus as its CEO Rex Tillerson prepares for confirmation hearings for the role of U.S. secretary of state. The company and Tillerson announced plans to cut all ties to the company to remove any conflict of interest. The $182 million that Tillerson would have made over the next decade will be placed in an independently managed trust should he receive approval from Congress.
- In earnings news, look for quarterly reports from Sonic Corp. (Nasdaq: SONC), Resources Connection (Nasdaq: RECN), Mistras Group Inc. (NYSE: MG), UniFirst Corp. (NYSE: UNF) and Landec Corp. (Nasdaq: LNDC).
Today's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Redbook at 8:55 a.m.
- Gallup US Consumer Spending Measure at 2 p.m.
- FOMC Minutes at 2 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.