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In Dow Jones news today, stocks climbed higher as President Donald Trump released his budget plan, "A New Foundation for American Greatness."
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Now here's a closer look at today's most important market events and stocks, plus Wednesday's economic calendar.
The Five Top Stock Market Stories for Tuesday
- President Donald Trump has released his 2018 budget, and it's generating a massive amount of headlines. The budget offers more than just spending cuts... it redefines the role of the government in the U.S. economy in the 21st century. The plan would slash $3.9 trillion in government spending over the next decade and make big cuts to the EPA, the U.S. State Department, and the Department of Education. Some have accused President Trump of attempting to roll back the "Great Society" plans of Lyndon B. Johnson.
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- In economic news, sales of new single-family homes fell from a nearly 10-year high. Overall, April sales fell by 11.4%, with sales on the West Coast leading the downturn. Still, markets are giving the industry a pass this month since numbers dipped from March figures that were the highest level of sales since October 2007. Economists say that falling unemployment rates continue to provide younger Americans with greater financial opportunity and resources to purchase their first home. Shares of homebuilder stocks were mixed on the day. Shares of KB Home (NYSE: KBH) dipped 1.3%, while shares of Hovnanian Enterprises Inc. (NYSE: HOV) climbed 0.4%.
- The U.S. Federal Reserve was back in focus Tuesday after several members of the central bank spoke on the state of the U.S. economy and prospects for a rate hike next month. Thanks to the unemployment rate reaching a 10-year low in April, it's likely that interest rates are going up in June 2017. So, how will interest rates affect your money? Read our latest insight, right here.
- The fiduciary rule will take effect June 9 without any more delays, said Labor Department Secretary Alexander Acosta in a Wall Street Journal opinion piece published late Monday. "We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input," Acosta said. The fiduciary rule is a highly contested piece of legislation produced during President Obama's time in office.
- Crude oil prices hit a five-month high on growing optimism that OPEC members and non-members will vote to extend a deal to cap excessive crude production another nine months. The global oil cartel will meet Thursday to discuss production goals. The WTI crude oil price today added 0.6%, and Brent crude climbed 0.5%.
Three Stocks to Watch Tuesday: AZO, TOL, FCAU
- In earnings news, shares of AutoZone Inc. (NYSE: AZO) plunged nearly 12% after the company reported its fiscal third-quarter results. The company fell short of Wall Street's expectations of earnings per share (EPS) of $12.01 on top of $2.70 billion in revenue. The company reported EPS of $11.44 and reported a 0.8% decline in same-store sales. The earnings miss also sent shares of O'Reilly Automotive Inc. (Nasdaq: ORLY) and Genuine Parts Co. (NYSE: GPC) down on the day.
- Shares of Toll Brothers Inc. (NYSE: TOL) fell 0.68% despite the home construction firm topping Wall Street earnings expectations. The firm reported EPS of $0.63, topping consensus expectations by $0.10. The company said it had its best-selling season in a decade this spring.
- Shares of Fiat Chrysler Automobiles NV (NYSE: FCAU) fell 4.1% after the U.S. government sued the company over excess emissions. The U.S. Justice Department has accused the auto manufacturer of using software to bypass the emission controls in its diesel vehicles. The lawsuit is reminiscent of a lawsuit filed against Volkswagen, which admitted in 2015 to using software to cheat emissions tests. The German auto manufacturer ended up paying up to $25 billion to handle owner claims, deal with federal, state, and local regulators, compensate dealers, and buy back up to 500,000 vehicles.
- Look for earnings reports from Intuit Inc. (Nasdaq: INTU), Jive Software (Nasdaq: JIVE), Container Store Group Inc. (NYSE: TCS), Universal Corp. (NYSE: UVV), and Tilly's Inc. (Nasdaq: TLYS).
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Wednesday's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- FHFA House Price Index at 9 a.m.
- PMI Composite Flash at 9:45 a.m.
- Existing Home Sales at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Two-Year FRN Note Auction at 11:30 a.m.
- Five-Year Note Auction at 1 p.m.
- FOMC Minutes at 2 p.m.
- Minneapolis Fed Bank President Neel Kashkari Speaks at 6 p.m.
- Dallas Federal Reserve Bank President Robert Kaplan Speaks at 6 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.