The Dow Jones news today is highlighted by a more hawkish stance from the Bank of England as it signals interest rates will rise faster than expected. Dow Jones futures are up five points after hitting an all-time high of 22,000 yesterday. Markets are keeping an eye out this morning for a weekly jobless figure that offers a precursor to tomorrow's official July employment report.
Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
Markets are flirting again with the 22,000 level that the Dow struck Wednesday thanks to a surprise earnings report from Apple Inc. (Nasdaq: AAPL). The tech giant reported earnings per share (EPS) of $1.67, a figure that beat estimates by 10 cents. Apple also easily beat revenue expectations. Wall Street went wild on news that the firm expects big sales figures when it releases its iPhone 8 later this year. Apple now estimates that its revenue for the fourth quarter could hit $52 billion, a number that shatters analysts' expectations.
It will be another busy day of earnings reports. Stronger-than-expected earnings reports have fueled a six-day winning streak for the Dow Jones Industrial Average, with consecutive all-time closing highs. Markets are largely ignoring the growing dysfunction in Washington, D.C., as investors no longer expect that the Trump administration will be able to deliver healthcare reform, tax cuts, or infrastructure spending in 2017.
In economic news, the U.S. Department of Labor announced that weekly jobless claims fell to 240,000 last week. That figure is below the 242,000 expected by analysts. The positive figure comes a day ahead of Friday's official July employment report. Consensus expectations call for the U.S. economy to add 178,000 new jobs in the last month and for the unemployment rate to fall to 4.3%. Should the Labor Department's report meet forecasts, markets can anticipate a lot of chatter about the U.S. Federal Reserve raising interest rates again by the end of the year.
Across the Atlantic, the Bank of England decided to hold interest rates in place but lowered its growth forecasts in the wake of the Brexit decision. By a vote of 6-2, the central bank held its benchmark interest rate at 0.25% despite concerns about inflation and stagnant wage growth. The Bank of England also cut its GDP expectations to 1.7% for 2017 and just 1.8% in the following year.
Crude oil prices were pushing higher on news that the United States experienced record gasoline demand last week. The Energy Information Administration said Wednesday that the nation's gasoline demand increased to 9.84 million barrels. That figure accompanied a report that crude inventory levels fell by 1.5 million barrels last week. The report offset concerns about rising OPEC production a few days ahead of the global oil cartel's critical meeting to discuss ongoing efforts to curb excessive supply. The WTI crude oil price today added 0.2%. Brent crude gained 0.1%.
Three Stocks to Watch Today: TSLA, YUM, AET
Shares of Tesla Inc. (Nasdaq: TSLA) added more than 6% in premarket hours after Elon Musk's company reported stronger-than-expected earnings results and a smaller-than-expected quarterly profit loss. The firm reported an uptick in production for its Model S and said that preorders for the vehicle hit 500,000, about a 33% increase from previous expectations. However, the firm is going to need to raise capital yet again, bringing new concerns and challenges to the company's future. That said, the firm received a strong upgrade from Piper Jaffray & Co., which said that the stock could rise by another 18%.
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Shares of Yum! Brands (NYSE: YUM) fell 0.6% in premarket hours despite news that the company topped Wall Street top- and bottom-line earnings expectations. The firm reported EPS of $0.68 on top of $1.45 billion in revenue. Consensus expectations called for EPS of $0.61 on top of $1.41 billion.
Shares of Aetna Inc. (NYSE: AET) added more than 4.6% in premarket hours after the firm easily topped Wall Street earnings expectations. The health insurance giant had an adjusted EPS of $3.42 per share compared to the consensus forecast of $2.35 a share. Aetna also beat revenue forecasts. The company reported success in its cost-cutting initiatives and cited stronger demand for its primary lines of business.
Look for additional earnings reports from GoPro Inc. (Nasdaq: GPRO), Yelp Inc. (Nasdaq: YELP), Activision Blizzard Inc. (Nasdaq: ATVI), Shake Shack Inc. (NYSE: SHAK), Regeneron Pharmaceuticals Inc. (Nasdaq: REGN), Allergan Plc. (NYSE: AGN), Weight Watchers International Inc. (NYSE: WTW), Kellogg Co. (NYSE: K) and Cabela's Inc. (NYSE: CAB).
Thursday's U.S. Economic Calendar (all times EDT)
Challenger Job-Cut Report at 7:30 a.m.
Jobless Claims at 8:30 a.m.
Gallup Good Jobs Rate at 8:30 a.m.
Bloomberg Consumer Comfort Index at 9:45 a.m.
PMI Services Index at 9:45 a.m.
Factory Orders at 10 a.m.
ISM Non-Manufacturing Index at 10 a.m.
EIA Natural Gas Report at 10:30 a.m.
Three-Month Bill Announcement at 11 a.m.
Six-Month Bill Announcement at 11 a.m.
Fed Balance Sheet at 4:30 p.m.
Money Supply at 4:30 p.m.
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Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.