Why Trump's Tax Plan Is Boosting the Dow Jones Today

Garrett Baldwin

The Dow Jones today is rising again thanks to a new Republican tax plan that will be announced today.

Dow Jones futures are up 28 points this morning now that Republicans have pulled their healthcare plan to replace Obamacare and turned to taxes. Reports are that the plan would cut taxes for corporations, the wealthy, and increase deductions for poorer Americans.

Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Now here's a closer look at today's most important market events and stocks, plus Wednesday's economic calendar.

The Five Top Stock Market Stories for Wednesday

• Market watchers are looking for new clues into U.S. President Donald Trump's plan to overhaul the U.S. tax code. Today, Trump is expected to provide details for his tax plan. Specifically, investors will be interested to know the size of these proposed cuts and how Republicans plan to balance the budget. The administration has proposed increasing the standard deduction, while eliminating several popular deductions like the one for home mortgage interest. 
• U.S. trade officials are looking to slap Canadian manufacturer Bombardier Inc. (OTCMKTS: BDRAF) with a 220% tariff on the C-Series jetliner. The move would be an effort by the Trump administration to protect Boeing Co. (NYSE: BA), which has argued that its rival has received significant subsidies from the Canadian government that allowed it to sell planes to Delta Air Lines Inc. (NYSE: DAL) at an extremely low price. The decision raises the stakes at a time when the U.S. government is renegotiating the North American Free Trade Agreement with Canada and Mexico.
• Get ready for another round of statements from members of the U.S. Federal Reserve. Three heads of regional branches of the central bank will offer their insight into monetary policy and the state of the U.S. economy. Yesterday, Fed Chair Janet Yellen pushed the U.S. dollar higher by suggesting that the central bank may move faster to raise interest rates in the near future. Yellen suggested that the Fed may have underestimated inflation levels and may have to take action sooner than later.
• Crude oil prices pushed higher thanks to increased optimism that the global supply and demand balance is correcting. Aggressive efforts by OPEC to cap excessive production have Brent crude prices eyeing potential highs not seen since 2015 thanks to a 22% gain in the third quarter. Meanwhile, keep an eye out for a key inventory report from the Energy Information Administration. Markets are curious if the government will confirm what a private reported from Tuesday, when they suggested that inventory levels fell by 761,000 barrels last week, according to the American Petroleum Institute. The WTI crude oil price today fell 0.1%. Brent crude dipped 0.5%.

• Finally, the price of Bitcoin was back above $4,000 on Wednesday. Helping to push it higher were statements by European Central Bank President Mario Draghi. The ECB head said Tuesday that the central bank has no power to regulate the cryptocurrency. This is a refreshing change from the actions of China's central bank in recent weeks. China has demanded the closures of local Bitcoin exchanges, banned OTC trading of cryptocurrencies, and banned initial coin offerings. Here's more on Draghi's statement.

Three Stocks to Watch Today: NKE, WFM, IMNP

• Shares of Nike Inc. (NYSE: NKE) are off more than 2.5% in premarket hours after the global sneaker manufacturer reported earnings after the bell Tuesday. The firm topped Wall Street profit expectations by reporting earnings per share (EPS) of $0.57. The $9.07 billion in revenue was in line with forecasts, but Wall Street was shaken a bit by reports that U.S. demand continues to wane. Nike was also tied to a bombshell FBI investigation into NCAA basketball announced yesterday.

• Wells Fargo & Co. (NYSE: WFM) just released a damning indictment of the stock market. The firm said this morning that it foresees a 4% to 8% decline in the U.S. markets by the end of the year. The prediction is largely based on valuation concerns, the lack of a robust U.S. economy, and Federal Reserve policy.

• Shares of Immune Pharmaceuticals Inc. (Nasdaq: IMNP) popped more than 70% in premarket hours after the company reported successful drug testing results. In a phase 2 trial for moderate-to-severe bullous pemphigoid, the firm reported positive results and a decline in patients' symptoms. Bullous pemphigoid is a rare and sometimes fatal skin condition that typically affects older patients.
• Look for additional earnings reports from Pier1 Imports Inc. (NYSE: PIR), Thor Industries Inc. (NYSE: THO), Jabil Inc. (NYSE: JBL), HB Fuller Co. (NYSE: FUL), Actuant Corp. (NYSE: ATU), Progress Software Corp. (Nasdaq: PRGS).

Wednesday's U.S. Economic Calendar (all times EDT)

• MBA Mortgage Applications at 7 a.m.
• Durable Goods Orders at 8:30 a.m.
• Minneapolis Fed Bank President Neel Kashkari speaks at 9:15 a.m.
• Pending Home Sales Index at 10 a.m.
• EIA Petroleum Status Report at 10:30 a.m.
• Two-Year FRN Note Auction at 11:30 a.m.
• Five-Year Note Auction at 1 p.m.
• Louis Fed Bank President James Bullard speaks at 1:30 p.m.
• Boston Federal Reserve Bank President Eric Rosengren speaks at 7 p.m.

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.

Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.

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