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The Dow Jones Industrial Average today was sliding ahead of Steven Mnuchin's confirmation hearing for the role of Treasury secretary and another busy day of earnings reports from blue-chip companies, including International Business Machines Corp. (NYSE: IBM) and American Express Co. (NYSE: AXP).
On Wednesday, the Dow Jones dipped 22 points thanks to a sharp downturn in crude oil prices and concerns about valuations in the market.
Let's look at the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,804.72; -22.05; -0.11%
S&P 500: 2,271.89; +4.00.; +0.18%
Nasdaq: 5,555.65; +16.93; +0.31%
Here's a look at today's most important market events and stocks, plus a look at Thursday's economic calendar.
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected an 11-point decline ahead of a busy day of economic data, Senate hearings, and monetary policy decisions in Europe.
First up, the markets will start reacting to key pieces of data before the official open Thursday. The monthly housing start report will provide insight into whether the new construction market can continue to maintain momentum and will influence stocks like KB Home (NYSE: KB) and Toll Brothers Inc. (NYSE: TOL). Weekly jobless claims will also roll out at the same time that the Philadelphia Federal Reserve releases its monthly Business Outlook Survey.
Traders are also anticipating a speech later today by Federal Reserve Chair Janet Yellen. On Wednesday, Yellen helped push the dollar and government bonds higher after signaling that the central bank is prepared to continue with several interest rate hikes in 2017.
Don't Miss: Our Essential Guide to Buying Gold and Silver
Next up, the U.S. Senate will hold the confirmation hearing of President-elect Donald Trump's Treasury secretary pick, Steven Mnuchin. Expect a contentious hearing and tough questions over his former firm OneWest's foreclosures on homeowners. The markets will pay attention to the Goldman Sachs Group Inc. (NYSE: GS) alumnus' quotes on the health of the U.S. dollar.
Third, all eyes are on Europe as the European Central Bank (ECB) meets in Frankfurt, Germany, to discuss monetary policy. The markets expect that Mario Draghi and his team will keep interest rates unchanged. However, notable critics of the European project have raised new concerns about the stability of the continental bloc's financial system. With Britain signaling plans for a "Hard Brexit," banks like Goldman Sachs and Bank of America Corp. (NYSE: BAC) have stressed that the changing system could alter their business and relationships in Europe.
Crude oil prices were pushing higher after the International Energy Agency (IEA) announced that international oil markets were tightening. These supply cuts come before OPEC completes its efforts to cap excessive production. The markets will be keeping an eye out for another critical report from the IEA during today's session. Later this afternoon, the energy agency will provide its official weekly report on U.S. crude inventory levels. The report comes a day after the American Petroleum Institute (API) announced yesterday that U.S. crude storage fell by 5.04 million barrels last week. That easily topped analyst expectations for a 342,000-barrel decline.
The WTI crude oil price today added 1.0%. Brent crude fell 0.9%.
But the big story is that we are on the eve of President-elect Donald Trump's inauguration.
The cabinet hearings are in motion. Washington, D.C., is prepared to be on lockdown. And journalists are preparing for four years of political battles between Republicans and Democrats.
But Money Morning Capital Wave Strategist Shah Gilani explains that investors should begin making their last-minute preparations today for a Trump presidency. That's because Shah anticipates that the Dow Jones and the S&P 500 will continue to move higher in the months ahead.
As Shah explains, "When you consider the improving strength of the economy and mood of investors alongside prospects for future growth and wealth generation, the markets' path of least resistance is: up."
Stocks to Watch Today, Jan. 19, 2017
- Shares of Alibaba Group Holding Ltd. (NYSE: BABA) were ticking higher Thursday on news that the Chinese e-commerce giant has signed a deal to provide cloud services to the Olympic Games for 12 years. In a statement released this morning, the company said it would help the International Olympic Committee operate its events "more efficiently." The news comes a day after reports indicated the President-elect Donald Trump is making Los Angeles' 2024 bid for the Olympics a major priority over the next year.
- Shares of Netflix Inc. (Nasdaq: NFLX) rallied 8.1% after the global streaming provider announced a huge jump in subscribers. The uptick in customers was far bigger than Wall Street had anticipated.
- In earnings news, Check Point Software (Nasdaq: CHKP) added more than 3.7% after the company topped Wall Street earnings and revenue expectations. The IT company reported earnings per share of $1.46, beating analyst expectations of $1.25. The firm reported quarterly revenue of $486.1 million, easily beating calls for $477.47 million
- Keep an eye out for additional earnings reports from International Business Machines Corp. (NYSE: IBM), Union Pacific Corp. (NYSE: UNP), Skyworks Solutions Inc. (Nasdaq: SWKS), American Express Co. (NYSE: AXP), JB Hunt Transport Services (Nasdaq: JBHT), Bank of New York Melon (NYSE: BK), GATX Corp. (Nasdaq: GATX), and PPG Industries Inc. (NYSE: PPG).
- Finally, read our General Electric Earnings Preview. As one of the most widely held stocks in the United States, the General Electric Co. (NYSE: GE) earnings report is always one of the most anticipated reports. Here's what you need to know before Friday.
Today's U.S. Economic Calendar (all times EST)
- Housing Starts at 8:30 a.m.
- Jobless Claims at 8:30 a.m.
- Philadelphia Fed Business Outlook Survey at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- San Francisco Federal Reserve Bank President John C. Williams Speaks at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- Three-Month Bill Announcement at 11 a.m.
- Six-Month Bill Announcement at 11 a.m.
- Two-Year FRN Note Announcement at 11 a.m.
- Two-Year Note Announcement at 11 a.m.
- Five-Year Note Announcement at 11 a.m.
- Seven-Year Note Announcement at 11 a.m.
- 10-Year TIPS Auction at 1 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
- Federal Reserve Chair Janet Yellen speaks at 8:00 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.