The Dow Jones today is dropping thanks to more turmoil in Spain over Catalonian secession...
Dow Jones futures are down 85 points ahead of the opening bell as Spain's proposal to strip Catalonia's leaders of their authority tanked European stocks. The CBOE Volatility Index (VIX) surged more than 14.6% on the 30th anniversary of Black Monday back in 1987. The downturn comes a day after the Dow closed above 23,000 for the first time.
The early morning downturn can likely be tied to uncertainty in Europe. This morning, the Spanish government said it would suspend the autonomy of Catalonia. The decision comes after the region's leader, Carles Puigdemont, did not drop Catalonia's bid for independence or offer more insight into his plans. The central government will strip this local government of powers. European stocks were off after the announcement. Puigdemont has said he will seek a split from Spain.
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This morning, the U.S. Department of Labor announced that total jobless claims for last week came in lower than analysts had expected. Roughly 222,000 Americans sought unemployment benefits last week. That figure is fewer than the 240,000 that economists had projected. This report is especially important in the wake of the September jobs report from two weeks ago. Markets are trying to determine if September's negative report was blip due in part to the impact of hurricanes along the Gulf Coast.
Earnings season is in full swing. Although Reuters said Tuesday that 84.4% of companies on the S&P 500 had topped Wall Street estimates as of that date, Thursday is starting off with mixed sentiment. Shares of Philip Morris International Inc. (NYSE: PM) slumped more than 4% after the company fell well short of Wall Street earnings estimates. The firm reported earnings per share (EPS) of $1.27 on top of $7.47 billion in revenue. Analysts called for EPS of $1.39 on $7.61 billion. The company reported weak shipping volumes to every region except for Canada.
The next Federal Reserve chair is still in doubt. With uncertainty over interest rates and a $4.5 trillion balance sheet, it remains unclear if U.S. President Donald Trump wants to continue with the safe pick in giving Janet Yellen another term or replacing her with an alternative mind set on monetary policy. The White House said that Trump is going to make an announcement on his nomination within the "coming days."
Crude oil prices fell after traders took profits off the table. Prices had been ticking higher over the last few trading sessions due to geopolitical tensions in Iraq and several other hotspots around the globe. The WTI crude oil price today fell 1.6%. Brent crude gave back 1.7%.
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Shares of eBay Inc. (Nasdaq: EBAY) plunged 5.5% even though the company matched Wall Street profit expectations after the bell Wednesday. The firm also beat revenue expectations. Today's downturn was fueled by news that the firm may experience lower profits in the coming quarter. eBay is also ramping up spending on a new website and its marketing efforts, which could affect its short-term profitability.
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Shares of Travelers Co. (NYSE: TRV) added 1.1% after the company reported earnings before the bell. Wall Street was highly interested in the impact of recent hurricanes on the firm's bottom line. The firm reported EPS of $0.91, more than double the $0.43 expected by Wall Street. The firm also beat revenue expectations. Overall, the firm did report about a $700 million loss due to Hurricanes Harvey and Irma.
It's a good time to be an investor in Gilead Sciences Inc. (Nasdaq: GILD). Shares jumped more than 3.5% after the Food and Drug Administration approved the company's gene therapy for lymphoma. This is the second approval for this form of cancer. Though the treatment has received approval, it will be very expensive. The cost of the drug, called Yescarta, will cost $373,000 per patient.
Look for additional earnings reports from PayPal Inc. (Nasdaq: PYPL), Intuitive Surgical Inc. (Nasdaq: ISRG), athenahealth Inc. (Nasdaq: ATHN), Hawaiian Holdings Inc. (NYSE: HA), Alliance Data Systems Corp. (NYSE: ADS), WD-40 Co. (Nasdaq: WDFC), and NCR Corp. (NYSE: NCR).
Thursday's U.S. Economic Calendar (all times EDT)
Jobless Claims at 8:30 AM ET
Philadelphia Fed Business Outlook Survey at 8:30 a.m.
Bloomberg Consumer Comfort Index at 9:45 a.m.
Leading Indicators 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.
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.
30-Year TIPS Auction at 1 p.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.