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The Dow Jones today will gain as the market prices in 100% odds of a September Fed rate cut.
Investors are preparing for a date with the Federal Reserve in Jackson Hole, Wyo. The U.S. central bank will kick off its annual seminar today. More on this below.
Plus: See who's beating earnings expectations this time…
Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
The Top Stock Market Stories for Thursday
- This morning, markets are reacting to the threat of a recession in the United States. Yesterday, the two-year and 10-year bond yields inverted once again, raising concerns about the stability of the economy. However, interest rates did tick a bit higher this morning after Kansas City Federal Reserve President Esther George suggested that last month's interest rate cut was unnecessary. In an interview with CNBC, George suggested that the size of the Federal Reserve's balance sheet could have been responsible for the yield curve inversion. A bond-yield inversion has been a reliable predictor in the past for a future recession. Still, it's worth noting that on average, the recession doesn't come for another 22 months.
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- This morning, the U.S. Labor Department reported that jobless claims fell more than expected last week. The number of Americans seeking jobless benefits registered at 209,000. That figure was short of the consensus economists' forecast of 216,000. The figure suggests that the U.S. labor market remains strong despite ongoing concerns about the broader economy. The Federal Reserve will stay in focus today as it kicks off its annual economic policy symposium in Jackson Hole. With the U.S. consumer still spending and the American job market resilient, the markets place the odds of another rate cut in September at 100%.
- Oil prices continued to rise today as investors focus on the Federal Reserve. Any monetary easing would support crude prices. WTI crude gained 0.8% to clock in at $56.16 per barrel. Brent crude gained 0.6% to hit $60.68 per barrel. The markets cheered a slight drop in U.S. inventory levels last week, according to the Energy Information Administration. In addition, markets reacted with concerns about stability in the Middle East. On Wednesday, Iran warned that its global oil shipments were cut to zero due to sanctions. The United States has led sanctions against both Iran and Venezuela this year.
Stock to Watch Today: JWN, TGT, LB
- Shares of Nordstrom Inc. (NASDAQ: JWN) added 7% in pre-market hours after the retailer topped Wall Street earnings on Wednesday. Despite growing challenges in the retail sector, the firm reported adjusted earnings per share of $0.90, topping Wall Street expectations of $0.75. However, the firm did fall short of revenue expectations. The company cited improvements in inventory management and productivity for its ability to beat top-line estimates.
- Shares of Target Corp. (NYSE: TGT) received an upgrade from Citibank even though shares already rallied more than 20% on Wednesday. The company crushed earnings expectations this week, with stronger digital sales and improved margins. Citibank now rates the stock a "Buy" from a "Hold."
- Shares of L Brands Inc. (NYSE: LB), however, slipped despite topping earnings-per-share expectations after the bell. The company fell short on revenue and cut forward guidance for its flagship Victoria's Secret franchise. Although the company did maintain its full-year guidance, the stock has been falling sharply in recent weeks due to concerns about its sales and its founder's ties to Jeffrey Epstein.
- Look for additional earnings reports from Salesforce.com Inc. (NYSE: CRM), VMware Inc. (NYSE: VMW), Hewlett-Packard Inc. (NYSE: HPQ), Dick's Sporting Goods Inc. (NYSE: DKS), Hormel Foods Corp. (NYSE: HRL), Intuit Inc. (NASDAQ: INTU), Ross Stores Inc. (NASDAQ: ROST), and Gap Inc. (NYSE: GPS).
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