The Dow Jones today will focus on a new threat from North Korea, which is planning to test another ICBM this week. Dow Jones futures are down 70 points this morning as the United States says North Korea is "begging for war."
While diplomats attempt to solve the ongoing North Korea crisis, markets will also keep an eye on the progress of trade relations in North America. Leaders from the United States, Canada, and Mexico will begin their second round of negotiations over NAFTA this week. U.S. President Donald Trump has repeatedly threatened to withdraw from the treaty should they fail to resolve portions that he believes are unfair.
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Over the weekend, the Chinese government issued a warning to holders of cryptocurrencies and banned initial coin offerings. The news pummeled the broader cryptocurrency market and drove Ethereum from near record highs of almost $400 to under $300 in just days. While Bitcoin was off 2.8% on Tuesday morning, Bitcoin owners shouldn't fret. In fact, John McAfee, one of the must bullish Bitcoin owners out there, just released an incredible prediction for the price of Bitcoin. You have to see it, here.
Meanwhile, keep an ear out for three speeches by members of the U.S. Federal Reserve on Tuesday. We're looking for clues today on the timing of the next interest rate hike by the central bank and its efforts to taper a $4.5 trillion balance sheet starting later this year. Most notable will be comments from Fed Gov. Lael Brainard, who hasn't been on the record regarding policy in almost a month. Brainard has largely supported the trimming of the balance sheet, however she may dial back support for an immediate rate hike.
Get ready for a pop in automotive stocks. This week, the U.S. House of Representatives will vote on a bill that will help accelerate the development of autonomous driving vehicles. The so-called "SELF DRIVE Act" aims to reduce bureaucratic red tape and allow more vehicle manufacturers to test self-driving vehicles on American streets. Advocates of the law say that it will be a boon to innovation. Critics are concerned about public safety.
Crude oil prices pushed higher Tuesday, as more refineries came back online in the wake of Hurricane Harvey's damage to the Gulf Coast. However, markets are now watching the progress of Hurricane Irma, a Category 4 storm that is taking aim at Florida. Florida and Puerto Rico have already declared a state of emergency before the storm hits the coast. The WTI crude oil price today added 1.5%. Brent crude gained 0.7%.
Three Stocks to Watch Today: UTX, HPE, LULU
In deal news, look out for details of another monster merger. This time, aerospace and industrial giant United Technologies Corp. (NYSE: UTX) will purchase Rockwell Collins Inc. (NYSE: COL) for $23 billion. The deal will create a $115 billion conglomerate with an entrenched foothold in the aerospace and defense industries. Both companies are major suppliers to Boeing Co. (NYSE: BA) and Airbus.
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Shares of Lululemon Athletica Inc. (Nasdaq: LULU) continue to press higher thanks to a round of upgrades to the athletic wear retailer. The company's stock jumped more than 7% on Friday after the firm easily beat Wall Street earnings expectations and shook off negative concerns regarding the impact of Amazon.com Inc. (Nasdaq: AMZN) and other competition. Susquehana Bank analyst Sam Poser just raised the bank's rating on LULU to a "Buy."
Hewlett Packard Enterprises Co. (NYSE: HPE) is in focus this morning as the company prepares to report quarterly earnings. Wall Street analysts anticipate that the company will report earnings per share (EPS) of $0.26 on top of $7.51 billion in revenue. The company will attempt to rebound after Friday's huge drop in share value. HPE stock plunged more than 20% before Labor Day weekend.
Look for earnings reports from Dave & Busters Entertainment Inc. (Nasdaq: PLAY), Casey's General Stores Inc. (Nasdaq: CASY), and HealthEquity Inc. (NYSE: HQY).
Tuesday's U.S. Economic Calendar (all times EDT)
Governor Lael Brainard speaks at 7:30 a.m.
Factory Orders at 10 a.m.
Three-Month Bill Auction at 11:30 a.m.
Six-Month Bill Auction at 11:30 a.m.
TD Ameritrade IMX at 12:30 a.m.
Four-Week Bill Auction at 1 p.m.
Minneapolis Fed Bank President Neel Kashkari speaks at 1:10 p.m.
Gallup US ECI at 2 p.m.
Dallas Federal Reserve Bank President Robert Kaplan speaks at 7 p.m.