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The Dow Jones news today will be dominated by the first day of the June FOMC meeting. Dow Jones futures are up 24 points as markets prepare for the Fed to hike interest rates. In other stock market news, the Dow and the Nasdaq will both attempt to rebound from their worst two-day stretches of the year.
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Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now here's a closer look at today's most important market events and stocks, plus Tuesday's economic calendar.
The Five Top Stock Market Stories for Tuesday
- The Federal Reserve will kick off its two-day June meeting on monetary policy this morning. Investors remain convinced that the U.S. central bank will hike interest rates again this month. Since the Fed began raising rates in the post-financial crisis work, Janet Yellen and her team project inflation levels will hit their 2% target by the end of the year. Meanwhile, the Fed has pointed to a strengthening U.S. job market to justify several rounds of rate increases this year. Yellen will hold a press conference on Wednesday afternoon to announce the Fed's latest rate decision. After the FOMC conference, be sure to pay attention to gold prices and our 2017 gold forecast for the months ahead.
- Chatter over stock "bubbles" is back in focus after a brutal two-day rally chopped billions of dollars off the market capitalizations of the "Fabulous Five" tech stocks. Shares of Apple Inc. (Nasdaq: AAPL) fell more than 7% in the previous two trading sessions as investors worry about the company's long-term growth prospects and its recent rally. Investment firm Mizuho slashed Apple's rating and target price in a research report Monday. Shares of Facebook Inc. (Nasdaq: FB), Amazon.com Inc. (Nasdaq: AMZN), Microsoft Corp. (Nasdaq: MSFT), and Alphabet Inc. (Nasdaq: GOOGL) all faced similar pressures in recent sessions. However, all are rebounding this morning.
The Fab Five Tech Stocks Are Down - Here's What It Means
- Crude oil prices were sliding after OPEC's recent production report indicated that its output increased last month. Once again, investors are starting to worry about the success of the global oil cartel's deal to cap excessive production. The downturn hasn't been significant, as markets still anticipate a decline in U.S. inventory levels. The American Petroleum Institute will release its weekly stocks report after the bell today. WTI crude oil price today dipped 0.4%, and Brent crude fell 0.3%.
- The "Retail Ice Age" claimed its latest victim again on Monday. Gymboree filed for bankruptcy and many investors are wonder who is next on the block for Chapter 11. Around the same time that the children's retail company filed, Fitch Ratings issued a new report on the stability of corporate debt in the retail sector. Among the companies that have a significant default risk are Sears Holdings Corp. (Nasdaq: SHLD), J. Crew, and Nine West Holdings. Money Morning Capital Wave Strategist and retail expert Shah Gilani has been making his readers very wealthy in recent weeks by playing this stunning trend in consumer retail. Get his latest insight right here.
- Finally, on the international front, markets are again paying heed to warnings out of North Korea. The Hermit Kingdom's state-run media has just offered one of the most chilling warnings to the West yet. North Korea is just one step away from successfully launching ICBMs at the U.S. mainland. Not only is this in violation of United Nations sanctions, but it also threatens most of the continental United States, Alaska, and Hawaii. Our own North Korean arms expert Bill Patalon has offered his latest insight on the geopolitical fallout and how investors should be thinking about this crisis. Read his insight right here.
Four Stocks to Watch Today: SAIC, XLRN, MRK, DB
- Deutsche Bank AG (USA) (NYSE: DB) is stirring the waters after the German investment bank said that it is unlikely that the U.S. economy will fall into recession by this time next year. The bank's top economists said that even though we have seen the yield curve flatten and recession risks arise, the probability of a recession sits at less than 10% through June 2018. DB stock was up 0.5% in pre-market hours.
- In earnings news, shares of Science Applications International Corp. (Nasdaq: SAIC) plunged more than 10% after the engineering and IT company stunned Wall Street with a horrible quarterly profit figure that was 27% below expectations. In its fiscal first quarter report, SAIC reported per-share earnings of $0.73 on top of $1.103 billion in revenue. Wall Street had anticipated earnings per share (EPS) of $1.00 on top of $1.108 billion in revenue.
- It's looking like a tough morning in the biotech sector. Shares of Acceleron Pharma Inc. (Nasdaq: XLRN) fell more than 7.5% after one of its advanced cancer drugs failed to meet expectations during phase 2 trials. Meanwhile, shares of Merck & Co. Inc. (NYSE: MRK) were off more than 1.2% after the company suspended enrollment for two studies of a cancer drug called Keytruda.
- Look for additional earnings reports from H&R Block Inc. (NYSE: HRB), John Wiley & Sons Inc. (NYSE: JW-A), and Motorcar Parts of America Inc. (Nasdaq: MPAA).
Tuesday's U.S. Economic Calendar (all times EDT)
- NFIB Small Business Optimism Index at 6 a.m.
- PPI-Final Demand at 8:30 a.m.
- Redbook at 8:55 a.m.
- Four-Week Bill Auction at 11:30 a.m.
- 30-Year Bond Auction at 1 p.m.
- New York Federal Reserve Bank President William Dudley Speaks at 1:45 p.m.