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Dow futures are up 18 points this morning as investors gauge whether Federal Reserve Chair Janet Yellen will raise interest rates despite the possibility that inflation woes will change her mind. But to find out what's really driving the Federal Reserve, click here...
Here are the numbers from Tuesday 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 Wednesday's economic calendar.
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The Five Top Stock Market Stories for Wednesday
- Today, Fed Chair Janet Yellen will hold her final press conference as leader of the U.S. central bank. The Fed is expected to raise interest rate for the third time this year, although it remains unclear just how much the central bank will add to its benchmark rate. Last night, markets projected more than an 87% probability of a 25-basis-point rate hike, according to the CME Group's FedWatch Tool. There is about a 13% probability that the hike will be 50 basis points.
- The U.S. Senate and House of Representatives have been working on a compromise to merge their two recently approved tax reform bills. The latest update suggests that the merged bill would reduce the U.S. corporate tax rate to 21%. According to CNBC, there are a few other stunning details from Republicans. Among them, the top individual tax rate would come in at 37%, homeowners would be allowed to deduct interest on mortgage loans up to $750,000, and pass-through deductions would decline to 20%.
- The price of gold was up just 0.1% in pre-market hours. Traders are being offered a very enticing opportunity to buy gold after prices recently fell to their lowest levels since July. The price of gold is down thanks to a stronger dollar, expectations for an interest rate hike later today, and migration of capital from hard assets into Bitcoin and other cryptocurrencies. But Money Morning Capital Wave Strategist Shah Gilani explains that this last factor is going to create a potential investment opportunity in gold that only comes along once in a decade. Read more of Shah's insight into why gold prices are set for a big gain in the future, right here.
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- Crude oil prices were pushing back toward their highest levels in 2.5 years. Markets are still digesting the impact of a shutdown to the Forties Pipeline, the largest pipeline in the North Sea, which pumps about 406,000 barrels per day. Engineers located cracks in the pipeline, and a long delay could be bullish news for international crude prices. Meanwhile, look for additional bullish sentiment today if the Energy Information Administration announces a sharp downturn to U.S. inventory levels. Average analyst expectations project a weekly downturn of 3.8 million barrels. The WTI crude oil price today added 0.6%. Brent crude gained 0.7%.
- The price of Bitcoin hit another all-time high Tuesday, as investors begin to speculate on the possibility of a $20,000 target by the end of the year. The global cryptocurrency market topped $500 billion thanks to strong gains in Ripple, Litecoin, and Ethereum. However, Bitcoin continues to shine, with roughly 60% of the global market capitalization. Investors have shrugged off concerns about short-sellers aiming to target Bitcoin though futures trading on the Chicago Board of Exchange.
Three Stocks to Watch Today: PEP, PAY, MDB
- PepsiCo Inc. (NYSE: PEP) has announced it plans to purchase 100 semi-trucks from Tesla Inc. (Nasdaq: TSLA), as the firm attempts to take the lead on alternative energy in the logistics business. This the largest pre-order for Tesla's semi-trucks and may help legitimize Tesla's vehicles as an alternative to diesel trucking.
- Shares of VeriFone Systems (NYSE: PAY) slipped more than 6% in pre-market hours after the company reported earnings after the bell Tuesday. Even though the firm beat Wall Street revenue and earnings forecasts, Verifone offered a lackluster earnings outlook for the current quarter. An uptick in competition in the payment space has threatened the firm's market share.
- Shares of MongoDB (Nasdaq: MDB) fell more than 5% after the firm reported earnings for the first time since its October debut on the public markets. The firm reported a smaller-than-expected earnings loss and beat revenue expectations by about $1.9 million. However, the first database firm to go public in two decades has been riddled by negative cash flow and massive competitive pressures from tech firms like International Business Machines Corp. (NYSE: IBM), Microsoft Corp. (Nasdaq: MSFT), Oracle Corp. (NYSE: ORCL), Amazon.com Inc. (Nasdaq: AMZN), and Google Inc. (Nasdaq: GOOGL). The company went public at $33 per share. This morning, it traded a tick above $27.50.
- Look for additional earnings reports from Pier 1 Imports Inc. (NYSE: PIR), Nordson Corp. (Nasdaq: NDSN), and ABM Industries Inc. (NYSE: ABM).
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- Consumer Price Index at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- FOMC Meeting Announcement at 2 p.m.
- FOMC Forecasts at 2 p.m.
- Fed Chair Press Conference at 2:30 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.