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The Dow Jones Industrial Average today is rising in pre-market trading as investors prepare for the "unofficial" start of earnings season.
On Friday the 13th, Wall Street is prepared for a busy day in the financial sector as we finally determine if banking earnings reports can justify the recent rally we've seen from stocks over the last two months.
On Thursday, the Dow Jones slipped 63 points, while the Nasdaq fell for the first time in 2017. It was a tough day in the technology sector, while insurance stocks pushed higher after the U.S. Senate began the process of repealing the Affordable Care Act.
Let's look at the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,891.00; -63.28; -0.32%
S&P 500: 2,270.44; -4.88; -0.21%
Nasdaq: 5,547.49; -16.16; -0.29%
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 12-point gain as investors prepare for a heavy day of earnings reports from several of the nation's largest financial institutions. The S&P financial sector has gained 17% since the election of Donald Trump. Now, the markets are expecting big things from banking stocks as we prepare for higher interest rates and another round of Wall Street deregulation. Keep an eye on earnings reports from JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC) and BlackRock Inc. (NYSE: BLK).
The Dow Jones is now up more than 9% since the election. On Wednesday, Bank of America warned that the index could fly a little too close to the sun in the weeks ahead. Calling it the "Icarus trade," Bank of America warned that the markets could "melt up" 10% in the first half of 2017 before reversing course. The bank warned of a potential downturn in the second half of the year. "It's getting long in the tooth," BOA analysts wrote in a research note. "The thing about a melt-up is you get a lot of people chasing it."
The markets will once again be paying attention to statements from members of the Federal Reserve. Later today, keep an eye out for a speech by Philadelphia Fed Bank President Patrick Harker. The speech comes a day after Fed Chair Janet Yellen expressed increased optimism over the short-term outlook of the U.S. economy. During a town hall meeting with academics, Yellen said that in the "short term, I would say I don't think there are serious obstacles. I see the economy as doing quite well."
Crude oil prices were falling due to uncertainty about whether OPEC countries will honor their commitment to cap excessive production. Despite expectations that OPEC and 11 non-OPEC nations will continue their cuts ahead of a meeting in Vienna, Austria, later this month, traders will be keeping an eye on a key report from Baker Hughes Inc. (NYSE: BHI) this afternoon. U.S. crude producers have steadily increased the number of production rigs over the last 10 weeks.
The WTI crude oil price today fell 0.7%. Brent crude fell 0.6%.
But the big story is the Affordable Care Act.
On Thursday, Rep. Paul Ryan (R-WI) said that the GOP will repeal and replace Obamacare. The statement comes shortly after the U.S. Senate took its first steps toward repealing the law after it passed a new budget by 51 votes to 48 votes. But the deal is far from done.
As Money Morning explains, there are several Republicans who could kill the Obamacare repeal process. That's because ACA repeal could add $9.7 trillion to the national debt over the next decade. Here's how...
Stocks to Watch Today, Jan. 13, 2017
- Shares of Apple Inc. (Nasdaq: AAPL) were pushing higher after Consumer Reports said it will now recommend that it is acceptable for customers to purchase the technology giant's new MacBook. The watchdog had previously raised concerns about the MacBook due to inconsistencies tied to the gadget's battery life. "Consumer Reports has now finished retesting the battery life on Apple's new MacBook Pro laptops, and our results show that a software update released by Apple Jan. 9 fixed problems we'd encountered in earlier testing," Consumer Reports wrote yesterday.
- Shares of Bank of America Corp. (NYSE: BAC) were off 3% after the financial giant reported fourth-quarter earnings. The firm beat top-line earnings expectations and reported an EPS of $0.40. That five was $0.02 above Wall Street expectations. However, the firm did fall slightly short of revenue expectations.
- In earnings news, keep an eye out for additional earnings reports from JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: BAC), Blackrock Inc. (NYSE: BLK), and PNC Financial Services Group Inc. (NYSE: PNC).
Today's U.S. Economic Calendar (all times EST)
- PPI-Final Demand at 8:30 a.m.
- Retail Sales at 8:30 a.m.
- Philadelphia Federal Reserve Bank President Patrick Harked speaks at 9:30 a.m.
- Business Inventories at 10 a.m.
- Consumer Sentiment at 10 a.m.
- Baker Hughes 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.