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Investors are expecting an increase in the Dow Jones today as the Federal Reserve meets to decide on whether it will raise interest rates for the third time in 2017.
Dow futures are up 29 points this morning as investors prepare for the start of the December FOMC meeting. Here's why the Fed rate hike will boost gold prices in 2018...
Here are the numbers from Monday 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 Tuesday's economic calendar.
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The Five Top Stock Market Stories for Tuesday
- Yesterday was a busy news day in Washington, D.C. Headlines announced that a special investigator is exploring whether U.S. President Donald Trump obstructed justice. In addition, U.S. Sen. Kirsten Gillibrand (D-NY) has called on President Trump to resign over accusations of sexual misconduct that have followed him since the onset of his 2016 election campaign. Finally, Republicans in the Senate continue to face pushback on their proposed tax reform bill, this time from entrepreneurs who would earn more than $500,000. According to the Tax Center, each dollar earned over $500,000 would effectively turn negative in value due to taxes and associated preparation costs.
- The Federal Reserve will hold its final meeting of the year this week. Markets expect to see the third interest rate hike of 2017 in the next 48 hours. The only question is, how large will this rate hike be? According to CME Group's FedWatch Tool, markets have set an 85% probability of a 25-basis-point increase. Markets project a 15% chance of a 50-basis-point hike. Fed Chair Janet Yellen will speak during her final press conference at the helm of the central bank tomorrow afternoon. She will step down in February, when Fed Gov. Jerome Powell takes over as Fed chair.
- Gold prices are down slightly ahead of today's meeting of the FOMC. The potential uptick in interest rates would strengthen the value of the U.S. dollar and weigh on commodity prices around the globe. With gold prices sitting just below $1,250 per ounce, the yellow metal is creating an excellent opportunity for investors. With a significant amount of geopolitical threats on the horizon, today's price of gold is highly attractive and could very well be the best time to get in ahead of 2018.
- Crude oil prices pushed higher following Monday's failed terrorist attack and news that the North Sea pipeline was shut down for repairs. The Forties crude pipeline from the North Sea pumps about 450,000 barrels of crude per day into a processing terminal in Scotland. This region is where Brent crude prices are effectively set for the global markets. The WTI crude oil price today added 1.1%. Brent crude gained 1.2%.
- The price of Litecoin topped $200 for the first time Monday evening, as it surged up to roughly $218 per coin and added more than 50% in just 24 hours. Known as the "silver" to Bitcoin's "gold", Litecoin has rallied more than 120% over the last week thanks to incredible optimism in the cryptocurrency space. Meanwhile, Bitcoin topped $17,000 again Monday after the launch of futures trading for the commodity at the Chicago Board of Exchange. For more on what else is driving the price of Bitcoin and other top cryptocurrencies, including Litecoin, go here now.
Four Stocks to Watch Today: BA, CMCSA, DIS, OSTK
- Shares of Boeing Inc. (NYSE: BA) added more than 1% in pre-market hours after the company announced plans to hike its quarterly dividend by 20%. The aerospace and defense giant said it will also replace its current share buyback program with a new program worth about $18 billion. Boeing has been a longtime favorite of Money Morning Executive Editor Bill Patalon. In fact, Bill nailed his call on Boeing stock back in February, when he discussed the enormous profit potential in the firm's future.
- On the deal front, we can count out on a major merger this month involving Comcast Corp. (Nasdaq: CMCSA). The cable giant announced it was dropping its bid to purchase assets from 21st Century Fox (Nasdaq: FOXA). Though a deal may still be in play for some of Fox's assets, the company will lose any leverage it had with another bidder. According to reports, just Walt Disney Co. (NYSE: DIS) is considering a bid, but there is always a possibility that another rival or private equity firm enters at the eleventh hour to make an offer. Shares of DIS stock are on the rise in pre-market hours.
The 3 Craziest Corporate Scandals of 2017
- Shares of Overstock Inc. (Nasdaq: OSTK) jumped 22% Monday and added another 3% in pre-market hours thanks to its ongoing exposure to the surge in the Bitcoin price and its underlying blockchain technology. The stock really took off after Morgan Stanley Investment Management revealed it has an 11.4% stake in the e-commerce giant.
- Keep an eye out for additional results from VeriFone Systems Inc. (NYSE: PAY), Arrowhead Pharmaceuticals Inc. (Nasdaq: ARWR), and Civitas Solutions Inc. (Nasdaq: CIVI).
Tuesday's U.S. Economic Calendar (all times EST)
- 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-Yr Bond Auction at 1 p.m.
- Treasury Budget at 2 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.