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The Dow Jones news today features banks passing a Federal Reserve stress test and the Senate debating a new healthcare bill to replace Obamacare. Dow Jones futures are down 27 points this morning while crude oil prices stay near yearly lows.
Here are the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
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Now here's a closer look at today's most important market events and stocks, plus Friday's economic calendar.
The Five Top Stock Market Stories for Friday
- The U.S. financial sector appears to be well capitalized. On Thursday, the Federal Reserve said that 34 of the nation's largest banks passed the first stage of the Fed's annual stress test. The test was based on a scenario of whether banks would still be able to lend money if U.S. unemployment surged to 10% and home prices cratered. With three members of the Fed speaking today, expect central bankers to comment on the state of the banking industry and debate the merits of additional interest rate hikes in 2017.
- Markets are trying to make sense of a "flash crash" on an exchange that trades Ethereum, a cryptocurrency that has surged over the last 12 months. On Wednesday, prices of Ethereum plunged from roughly $320 to $0.10 after a multimillion-dollar "sell" order created chaos on the Coinbase-owned GDAX. The sell order, which led to an initial downturn in price, triggered more than 800 stop-loss orders and sent the price falling even further. The Ethereum flash crash is a lesson that investors need to be patient with this new market as it tries to build its infrastructure.
- Crude oil prices were showing a slight recovery in premarket hours after a dismal June. Global oil prices have experienced their worst start to a year since the 1990s. Traders are growing increasingly nervous that OPEC's plan to cut excessive supply will not be enough to push prices above $50.00 per barrel any time soon. The falling cost of U.S. shale production has been a boon to the energy business in America, and OPEC leaders may have to make additional cuts to try to support prices. The WTI crude oil price today added 0.2%. Brent crude gained 0.2%.
- Yesterday, we noted that Qatar Airlines is trying to purchase 10% of U.S. giant American Airlines Group Inc. (Nasdaq: AAL). The deal pushed AAL stock higher, but company CEO Doug Parker is anything but thrilled about the rumor. Parker sent a letter to company employees explaining that his executive team is not happy about Qatar's plans. However, he said that there isn't anything they can do about it. AAL stock was flat this morning.
- On the international front, European leaders are meeting today in Brussels to continue the discussions over Brexit. One year has passed since British voters opted to leave the European Union, and the economic impact has been jarring. In the first quarter, economic growth in the United Kingdom registered at 0.2%. That figure was the lowest among all member nations in the European Union. Meanwhile, the British pound is off 14% since the vote.
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- BlackBerry Ltd. (Nasdaq: BBRY) shares fell more than 6% after the Canadian technology giant fell short of Wall Street earnings expectations. The company reported earnings per share (EPS) of $0.02 on top of $244 million in revenue. Consensus analyst expectations called for EPS of $0.03 on top of $275.34 million.
- Nordstrom Inc. (NYSE: JWN) shares are on the move this morning on news that the company is proceeding with its efforts to sell itself to a private equity shop. According to reports, the Nordstrom family, which owns roughly 30% of the retail giant, is leading the initiative.
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- Shares of Bed Bath & Beyond Inc. (Nasdaq: BBBY) fell more than 9% after the retail company fell well short of earnings expectations after the bell Thursday. While revenue just missed Wall Street expectations, its EPS of $0.58 was eight cents below consensus forecasts. The retail company continues to struggle against online rivals like Amazon.com Inc. (Nasdaq: AMZN) and margin pressures are weighing on the stock.
- Markets were also digesting an additional earnings report from Finish Line Inc. (Nasdaq: FINL). The retail line reported earnings and revenue figures largely in-line with Wall Street expectations. The firm matched EPS expectations of $0.23, while its $429.7 million in revenue was slightly below expectations.
Friday's U.S. Economic Calendar (all times EDT)
- PMI Composite Flash at 9:45 a.m.
- New Home Sales at 10 a.m.
- Louis Federal Reserve Bank President James Bullard speaks at 11:15 a.m.
- Cleveland Federal Reserve Bank President Loretta Mester speaks at 12:40 p.m.
- Baker-Hughes Rig Count at 1 p.m.
- Federal Reserve Board Gov. Jerome Powell Speaks at 2:15 p.m.
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.