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The Top Stock Market Stories for Friday
On Thursday, U.S. Attorney General Jeff Sessions took a major step that could stifle the ongoing boom in the marijuana legalization movement across the United States. To be candid, we think this is the start of a significant battle between states and the federal government on sovereignty. In the end, states are going to win this battle, and Congress should take up changes to the classification and prohibition of marijuana by the federal government this year in a rare act of bipartisanship. For five more legal weed predictions that you can cash in on in 2018, click here...
North Korea and South Korea will hold talks on Jan. 9 to discuss matters of mutual interest ahead of the Winter Olympics. The announcement comes just days after North Korean dictator Kim Jong Un and U.S. President Donald Trump exchanged hard rhetoric about nuclear weaponry. Jong Un is expected to express interest in sending a delegation to the Winter Olympics, which will be held in South Korea next month.
Gold prices are on pace for their fourth straight weekly gain, as prices topped $1,322 late Thursday night. A weakening U.S. dollar and growing geopolitical concerns around the globe have created an excellent opportunity for investors heading into the New Year. As we've stated, there are a wealth of bullish factors for gold in 2018. This morning's slight pullback may provide investors with a solid buying opportunity. Here's more if you're asking yourself: "Should I buy Gold in 2018?"
Crude oil prices are sitting at a three-year high as investors keep an eye on efforts by Iran's Revolutionary Guard to put down protests across the country. Protests among the nation's lower and rural classes erupted at the end of December due to anger over joblessness and the state of the nation's economy. Markets are also watching for an update on U.S. production today, clues into OPEC's goals for beyond 2018, and another border battle between India and China that could create additional price volatility. WTI crude oil price today added 0.1%, while Brent crude added 0.4%.
Is Bitcoin in a bubble? One of Wall Street's most famous prognosticators now thinks so. In a letter to investors this week, Jeremy Grantham said that the size and speed of the Bitcoin price surge over the last year outpaces the bubbles of the South Sea Co. in 1720, Dutch "Tulip Mania" in 1637, and the Wall Street collapse of 1929. "Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble," Grantham wrote.
Stocks to Watch Today: STZ, FB, BABA, SHLD, M
Shares of Constellation Brands Inc. (NYSE: STZ) fell 3.6% after the company reported earnings before the bell. Though the company topped Wall Street earnings and revenue expectations, a small dip in net sales may have investors concerned about the stock's valuation. The firm reported an impressive 21% jump in quarterly profits thanks in part to very strong beer sales during the Labor Day and Thanksgiving holidays. The firm also hiked its guidance and approved a $3 billion share buyback program.
Is Facebook Inc. (Nasdaq: FB) going to jump into the cryptocurrency space? CEO Mark Zuckerberg recently wrote in his Facebook 2018 mission statement that his primary goal is to fix Facebook. Part of the dialogue include statements about the power of cryptocurrency and decentralization. He noted that Chinese rivals in Alibaba Group Holding Ltd. (NYSE: BABA) and Tencent Holdings Ltd. (OTCMKTS: TCEHY) have been able to accelerate consumer purchases through mobile wallets. However, Facebook's mobile payment systems have failed to take off. Is this a hint that Facebook will establish its own cryptocurrency? "I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services," Zuckerberg wrote.
The Retail Ice Age continues to pound brick-and-mortar companies. Yesterday, Sears Holdings Corp. (Nasdaq: SHLD) and Macy's Inc. (NYSE: M) both announced another round of store closings as they attempt to mitigate changes in consumer behavior and challenges from e-commerce competitors. Sears will close 100 locations, while Macy's announced another 11 locations it will shutter in addition to its existing restricting plan. These announcements are not surprising, especially when looking at Sears. Sears has been in a death spiral for the better part of a decade. This is one of the most likely retail companies in its space to face bankruptcy in 2018 or 2019.
Additional companies reporting earnings on Friday include Cal-Maine Foods Inc. (Nasdaq: CALM) and Greenbrier Cos. (NYSE: GBX).
Friday's U.S. Economic Calendar (all times EST)
Employment Situation at 8:30 a.m.
International Trade at 8:30 a.m.
Factory Orders at 10 a.m.
ISM Non-Manufacturing Index at 10 a.m.
Philadelphia Federal Reserve Bank President Patrick Harker speaks at 10:15 a.m.
Cleveland Fed Bank President Loretta Mester speaks at 12:30 p.m.
Baker-Hughes Rig Count at 1 p.m.
Treasury STRIPS at 3 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.