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The Dow Jones Industrial Average today (Monday, Aug. 21) projected a five-point gain in premarket hours as Americans prepare for a rare event in the sky. Across the United States, a solar eclipse will generate the most headlines, while geopolitics and the markets take a backseat to celestial events.
Day will turn into night as the eclipse moves through 14 states between 1:16 p.m. EDT and 2:47 p.m. EDT. The news "overshadows" reports that U.S. and South Korean forces are in the process of holding war games. We're expecting more geopolitical risk in the days ahead due to the uncertainty of how North Korea will respond to the military exercises.
Here are the numbers from Friday 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 Monday's economic calendar.
The Five Top Stock Market Stories for Monday
- This week, central bankers from around the globe will meet in Jackson Hole, Wyo., for their annual discussion on monetary policy. Attendees will include Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi. Markets are looking for clues into the timing of the Fed's next rate hike and what other banks around the globe plan to do next in their era of ultra-low interest rates. Expect a lot of chatter about Yellen and Draghi as the week progresses.
- Former Congressman Ron Paul has predicated the possibility of a 50% drop in the stock market. The Texas Republican blamed dysfunction on Wall Street for the possibility of such a significant pullback in the markets. In late June, Paul had predicted a 25% decline, but has upped the stakes on concerns that Wall Street was exaggerating the health of the economy and that the Federal Reserve's low interest rate policy has overinflated the Dow.
- It looks like Uber Technologies Inc. is on the verge of getting a new CEO, but the leading candidate will surprise. Multiple industry reports indicate that former General Electric Co. (NYSE: GE) CEO Jeff Immelt is the leading candidate to take over the role at the ride-sharing giant. Immelt stepped down from GE in July, while Uber's CEO and founder Travis Kalanick stepped down after a series of public relations problems. Immelt, who has close ties to D.C., would be expected to help right the company's direction and change its culture. In addition, we may finally see that long-awaited Uber IPO, which has been delayed for some time.
- In deal news, Sempra Energy (NYSE: SRE) announced plans to purchase bankrupt energy giant Energy Future Holdings Inc. for an enterprise value of about $18.8 billion. The deal includes the sale of Texas power distributor Oncor Electric Delivery and outbids Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A) in the process. Berkshire had refused to increase its $18.1 billion bid for the company.
- Crude oil prices were flat as markets digested Friday's report from Baker Hughes Inc. (NYSE: BHI) that indicated an uptick in U.S. production. The WTI crude oil price today added 0.1%. Brent crude dropped 0.2%.
Three Stocks to Watch Today: FCAU, SBUX. ADP
- Shares of Fiat Chrysler Automobiles NV (NYSE: FCAU) popped more than 3.5% on news that Chinese auto manufacturer Great Wall Motor Co. (OTCMKTS: GWLLF) is considering a deal to purchase the Jeep brand from the Italian auto giant. Shares of FCAU have increased by double digits during last week's trading on speculation that a deal was in the works.
- Shares of Starbucks Corp. (Nasdaq: SBUX) added roughly 1% in premarket hours after the coffee chain received a positive recommendation from Barron's. The investment publication highlighted the firm's mobile order-and-pay application as a popular tool among customers and said the stock could rise by 20% over the next year.
- Shares of Automatic Data Processing LLC (NYSE: ADP) will generate a lot of buzz today after the company's board pushed back against one of Wall Street's top hedge fund managers. The payroll-processing giant's board voted against Bill Ackman's plans to replace three directors at the company. The board said none of Pershing Square's three director nominees would provide new skills or relevant experience. This could be the beginning of a larger proxy battle between Ackman's firm and ADP.
- Look for earnings reports from Mobileye NV (NYSE: MBLY), Fabrinet (NYSE: FN), Nordson Corp. (Nasdaq: NDSN), and Premier Inc. (Nasdaq: PINC).
Monday's U.S. Economic Calendar (all times EDT)
- Chicago Fed National Activity Index at 8:30 a.m.
- Four-Week Bill Announcement at 11 a.m.
- Three-Month Bill Auction at 11:30 a.m.
- Six-Month Bill Auction at 11:30 a.m.
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