Why the Fed Is Keeping the Dow Jones Flat Today

Garrett Baldwin

The Dow Jones is flat in pre-market hours despite closing at a record high yesterday…

The U.S. Federal Reserve is releasing minutes from its September meeting today, and traders are waiting to see how the central bank plans to unwind its $4.5 trillion balance sheet before reacting. Fortunately for our readers, our Fed expert is already one step ahead of the Fed's decision-making…

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

• The Dow Jones Industrial Average is flirting with the 23,000 level for the first time in history. On Tuesday, the International Monetary Fund announced that global economic growth is expected to hit 3.7% in 2017 and 3.6% in 2018. Both numbers were larger than previous estimates by the global watchdog. That said, the United States was a laggard in this report. The United States is expected to generate growth of 2.2% this year. The figure comes despite U.S. President Donald Trump's promises to deliver 3% growth and economically friendly policies like tax reform, financial deregulation, and revised trade deals.

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• Speaking of revised trade deals, President Trump will meet with Canadian Prime Minister Justin Trudeau at the White House today. Trudeau is aiming to turn Trump's focus to Mexico as the nations continue negotiation over trade. The Trump administration recently slapped tariffs on Canadian lumber exports and Bombardier airliners.

• It seems that another geopolitical crisis has been averted. In the wake of Catalonia's referendum to declare independence from Spain, the province's leadership is going to postpone a formal announcement. Catalan President Carles Puigdemont will not declare independence and is instead seeking a formal discussion with government leaders in Madrid. Spain has been mired by high unemployment, heavy taxation, and large debts for a long time.

• Crude oil prices were flat in Wednesday trading as markets turned their attention to supply-and-demand metrics in 2018. This morning, Barclays Plc. (NYSE: BCS) increased its 2018 oil forecast to $56.00 per barrel. That figure represents a $5 hike. The WTI crude oil price today fell 0.1%. Brent crude added 0.2%.

• Cybersecurity stocks are in focus after NBC News released a report on North Korea's plans to attack U.S. electric power companies. According to a report from cybersecurity giant FireEye Inc. (Nasdaq: FEYE), North Korean hackers have targeted victims with spear-phishing e-mails designed to load malware onto company hardware. The report is further evidence of why investors should own cybersecurity stocks as the trend of cyber-warfare accelerates in the 21st century.

Four Stocks to Watch Today: DAL, BLK, AMZN, WMT

• In earnings news, shares of Delta Air Lines Inc. (NYSE: DAL) are up more than 1.4% after the company easily topped Wall Street earnings expectations. Wall Street analysts projected earnings per share (EPS) of $1.54 on top of $11.03 billion in revenue, figures that were dampened to take Hurricanes Harvey and Irma into account. The firm reported EPS of $1.60 on top of $11.06 billion. Shares of rivals United Continental Holdings Inc. (NYSE: UAL) and American Airlines Group Inc. (Nasdaq: AAL) both saw gains in pre-market hours.

• Shares of BlackRock Inc. (Nasdaq: BLK) are on the move as the firm reports earnings before the bell. Even though the firm reported numbers in line with Wall Street earnings expectations and announced that global assets are at nearly $6 trillion, the stock was still off 0.32%. Analysts are paying close attention to the impact of consumers' shift to lower-cost funds. BlackRock reported EPS of $0.50 on $1.133 billion in revenue.

• The e-commerce battle between Amazon.com Inc. (Nasdaq: AMZN) and Wal-Mart Stores Inc. (NYSE: WMT) heated up on Tuesday with announcements from both companies. The two rivals are attempting to improve the customer experience with new experimental programs. Amazon is said to be exploring Prime delivery that would allow couriers to leave products in a customer's car or even their refrigerator. Meanwhile, Wal-Mart has announced Mobile Express Returns. The new service is designed to expedite the in-store and online return processes. Wal-Mart shares jumped more than 3% Tuesday after the firm announced plans to dramatically increase its overseas presence and to buy back another $20 billion in shares over the next two years.

• Look for additional earnings reports from Fastenal Co. (Nasdaq: FAST) and Blackhawk Network Holdings Inc. (Nasdaq: HAWK).

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

• MBA Mortgage Applications at 7 a.m.
• Chicago Fed Bank President Charles Evans speaks at 7:15 a.m.
• JOLTS at 10 a.m.
• Three-Year Note Auction at 11:30 a.m.
• 10-Year Note Auction at 1 p.m.
• FOMC Minutes at 2 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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