The Dow Jones today is starting the day flat after U.S. President Donald Trump shocked Washington by making a surprise deal with Congressional Democrats on raising the debt ceiling. Dow Jones futures are down five points in premarket hours as Trump’s economic agenda is now in question and Florida braces for Hurricane Irma.
The balance between QE and Treasury supply will begin to shift in July. The underlying bid it has provided for stocks and Treasuries will begin to fade.
This report tells why, and what to look for in the data and the markets. GO TO THE POST
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 most important market events and stocks, plus Thursday’s economic calendar.
The Five Top Stock Market Stories for Thursday
- Republican leaders were shocked when President Trump threw his support behind Democrats on a deal that will provide disaster relief to Houston and other hurricane victims, raise the debt ceiling, and fund the U.S. government through December. The decision to keep the government open will give Democrats an immense amount of leverage when another budget battle looms at the end of the year. According to CNN, one insider in the Senate said that Trump blew up any chance to advance his economic agenda later this year, and that Democrats will use this win as leverage to ensure they can protect the Affordable Care Act or other policies in the future.
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- Speaking of disaster relief, Hurricane Irma – the largest hurricane ever measured in the Atlantic Ocean – is barreling toward the coast of Florida. According to the Prime Minister of Barbuda, the small island has been reduced to “literally rubble,” while 56,000 people in Puerto Rico have been left without running water. Miami residents are starting the process of the largest evacuation in nearly a decade. Meanwhile, many are growing increasingly angry that the dynamic pricing model used by airlines has sent the cost of air transportation out of the region into the stratosphere. Some are accusing airlines like Delta Air Lines Inc. (NYSE: DAL) and American Airlines Group Inc. (Nasdaq: AAL) of price-gouging as Friday appears to be the last day that planes will be able to get out of the area.
- On the global front, European Central Bank President Mario Draghi said the ECB will keep interest rates the same, but analysts are looking for clues on when it will trim down its balance sheet. The central bank purchases about $72 billion (60 billion euros) in bonds every month, a program that’s expected to end soon. Meanwhile, pay attention to speeches from four members of the Federal Reserve Thursday. The U.S. central bank is also exploring a rate hike and the timing of its plan to start winding down a $4.5 trillion balance sheet.
- In economic news, the U.S. Labor Department announced that the number of Americans seeking unemployment benefits last week came in at a two-year high. The U.S. Labor Department cited a short-term bump fueled by Hurricane Harvey. The number of Americans seeking benefits jumped to 298,000 for the week. That was a 62,000 person increase and the highest number we’ve seen since April 2015.
- Crude oil prices were mixed Thursday thanks to a weaker U.S. dollar and news that the U.S. refinery network is still coming back online in the wake of Hurricane Harvey. Today, traders will be keeping a close eye on how the hurricane impacted domestic inventory levels last week. The Energy Information Administration will release its weekly report later this morning. The WTI crude oil price today fell 0.4%. Brent crude added 0.2%.
Three Stocks to Watch Today: PG, BKS, AMZN
- Shares of Procter & Gamble Co. (NYSE: PG) are up slightly in premarket hours. The uptick came after activist hedge fund manager Nelson Peltz released a 93-page report outlining his plans to alter the future of the conglomerate. Peltz’s Trian Partners is aiming to change the company’s “insular” culture and restructure the organization into three business lines.
What Happened to America’s Favorite Company?
- Amazon.com Inc. (Nasdaq: AMZN) stock is ticking higher this morning after the company received another bullish recommendation and price target. This time, investment firm D.A. Davidson initiated coverage on the ecommerce giant, set a “buy” rating, and opened with a price target of $1,300. The bullish sentiment was fueled by Amazon’s recent purchase of Whole Foods. Meanwhile, Amazon announced this morning that it is looking to establish a second U.S. headquarters. Look for the firm to receive a wealth of taxpayer funded goodies for the right to become what has been called “HQ2.”
- Shares of Barnes & Noble Inc. (NYSE: BKS) are in focus after the embattled book retailer reported earnings before the bell. Wall Street had anticipated a quarterly EPS loss of -$0.14 on top of $871.4 million in revenue. The company fell short on both figures, reporting an EPS loss of -$0.15 on $853 million in revenue.
- Look for additional earnings reports from American Outdoor Brands (Nasdaq: AOBC), Veriphone Systems (NYSE: PAY), Finisar Corp. (Nasdaq: FNSR), Zumiez (Nasdaq: ZUMZ), Tailored Brands (Nasdaq: TLRD), and Conns Inc. (Nasdaq: CONN)
Thursday’s U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- Productivity and Costs at 8:30 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Quarterly Services Survey at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- Three-Month Bill Announcement at 11 a.m.
- Six-Month Bill Announcement at 11 a.m.
- 52-Week Bill Announcement at 11 a.m.
- Three-Year Note Announcement at 11 a.m.
- 10-Year Note Announcement at 11 a.m.
- 30-Year Bond Announcement at 11 a.m.
- Cleveland Fed Bank President Loretta Mester speaks at 12:15 p.m.
- Treasury STRIPS at 3:00 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
- Atlanta Fed Bank President Raphael Bostic speaks at 7 p.m.
- New York Fed Bank President William Dudley speaks at 7 p.m.
- Kansas City Fed Bank President Esther George speaks at 8:15 p.m.
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