Dow Jones Industrials: What to Expect This Week

A look ahead at what could move the Dow Jones Industrials.

May 18, 2014 at 7:05PM

The Dow Jones Industrials (DJINDICES:^DJI) gave up a modest amount of ground last week. But in the coming week, Dow investors have a lot to look forward to. Home Depot (NYSE:HD) will look to close out the first-quarter earnings season for the Dow Jones Industrials, while the Federal Reserve will be in the news with its latest release of FOMC meeting minutes, and that could move shares of financial giants Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM)


Home Depot has given investors one of the most impressive growth rates in the Dow Jones Industrials over the past several years, as the home-improvement retailer has managed to find ways to boost its business even during periods in recent years when the housing market wasn't as healthy as it has been lately. Now that housing has recovered, Home Depot has the opportunity to accelerate its growth by making use of its dual approach of courting both housing contractors and do-it-yourself homeowners. Competition has started to get stronger in the industry as Home Depot's main rival has stepped up its game and produce some impressive results of its own. This week, look to see if Home Depot can sustain its track record of profit growth and give positive signs for its near-term future.

Meanwhile, the Federal Reserve will release its latest Federal Open Market Committee minutes this week. As expected, the Fed chose at the end of April to keep interest rates at current low levels but to further reduce its bond-buying activity under quantitative easing. The reduction keeps the Fed on pace to eliminate bond buying completely by the end of this year.

For JPMorgan Chase and Goldman Sachs, what's most surprising about the end of quantitative easing is that it hasn't yet produced a huge spike upward in interest rates. After all, just the threat of reductions in bond buying a year ago made rates almost double. But worries about the stock market's health have made investors reconsider their risk tolerance, and that in turn has led to moves out of stock indexes like the Dow Jones Industrials and into perceived lower-risk assets like Treasury bonds. That trend has been good news for Dow banks JPMorgan and Goldman Sachs for a couple of reasons. JPMorgan has a mortgage-banking business that could see a reawakening of refinancing activity if rates stay at or fall below their current 2.5% level. Goldman could benefit from corporate refinancing at current lower rates, with at least one final wave of bond issuance before the falling demand for bonds from the Fed's exit stops the downward pressure on rates.

This week, the Dow Jones Industrials could continue to see volatility as investors assess the potential for a major correction. Keep your eye on JPMorgan, Goldman Sachs, and Home Depot in particular to see how they respond to the Federal Reserve's release and the end of earnings season.

Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under Wall Street's radar. To learn about about this company, click here to access our new special free report.

Dan Caplinger owns warrants on JPMorgan Chase. The Motley Fool recommends Goldman Sachs and Home Depot and owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers