The promise of tax reform had been a major driver of Wall Street's tremendous economic optimism heading into 2017. Ten months later, Republicans have struggled to get anything done on that front. U.S. President Donald Trump said on Monday that Republicans' performance in the 2018 midterm elections will largely depend on their ability to enact pro-growth economic policies. He also deflected blame toward Congress for the failure.
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Speaking of policy failures, the Affordable Care Act will be back in focus on Tuesday. That's because UnitedHealth Group Inc. (NYSE: UNH) is set to lead a busy day of earnings reports. The report comes just days after President Trump eliminated subsidies in his ongoing effort to gut "Obamacare." As the largest health insurance company in the nation, UnitedHealth Group will be the center of attention during its earnings call. Analysts will want to know how much of an impact Trump's subsidy cuts will have on their bottom line in the year ahead. Money Morning Chief Investment Strategist Keith Fitz-Gerald has offered his insight into how investors can profit from Trump's Obamacare order.
The other big story centering around Donald Trump on Tuesday is the president's decision to decertify the Iranian nuclear deal. The move allows Congress to pass new sanctions within the next 60 days. Money Morning Global Energy Strategist Dr. Kent Moors has been traveling the world and discussing the deal. In the circles he travels in, the story sits at the intersection between energy issues and rising geopolitical tensions. Here's what Kent has said about the impact of this deal and what it means for oil prices.
The Dow Jones isn't the only index that is on pace to set a new record high. Bitcoin is within range of the $6,000 mark as cryptocurrency markets continue to rise at a torrid pace. But the bigger headline in Bitcoin is that one of the U.S. government's biggest nemeses is making a killing on the cryptocurrency. Find out more about how Wikileaks has made an incredible return on Bitcoin.
Crude oil prices rose again Tuesday thanks to geopolitical premiums across the Middle East. Traders continue to monitor the ongoing tensions between the United States and Iran over a deal to curb the latter's nuclear weapons program. In addition, traders are weighing the impact of a major downturn in production in the Kurdish region of Iraq after pro-government forces took over the regional government. The WTI crude oil price today added 0.4%. Brent crude gained 0.5%.
Stocks to Watch Today: NFLX, GS, MS
Shares of Netflix Inc. (Nasdaq: NFLX) gained more than 1.0% despite news that streaming giant fell short of Wall Street earnings expectations after the bell Monday. The company reported a huge surge in customers around the globe. International membership increased by a staggering 49% compared to the same period in 2016. Although the firm topped revenue expectations, its $0.29 per share in earnings fell three cents short of analysts' consensus expectations.
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Shares of Goldman Sachs Group (NYSE: GS) are on the move as the investment bank reported third-quarter earnings this morning. Wall Street expected earnings per share (EPS) of $4.31 on top of $7.638 billion in revenue. Goldman beat those expectations with a profit increase of 2%. Investment banks have reported double-digit declines this quarter at their fixed income, currencies, and commodities trading desks. Still, Wall Street firms continue to top earnings expectations.
Shares of Morgan Stanley (NYSE: MS) are In focus as well, as the Goldman rival reported earnings before the bell. Analysts registered an average forecast of $0.81 on top of $8.947 billion in revenue. Instead, the company reported EPS of $0.93 on $9.197 billion in revenue. While fixed income trading slumped by 21% for the quarter, and overall trading was off 8%, the stock was buoyed by a big gain in wealth management revenue. The firm pulled in $4.22 billion from its wealth management division.
Tuesday will feature a busy day of earnings reports. Look for additional updates from International Business Machines Corp. (NYSE: IBM), Johnson & Johnson (NYSE: JNJ), Cree Inc. (Nasdaq: CREE), CSX Corp. (NYSE: CSX), Harley-Davidson Inc. (NYSE: HOG), and Canadian Pacific Railway Ltd. (NYSE: CP).
Tuesday's U.S. Economic Calendar (all times EDT)
Import and Export Prices at 8:30 a.m.
Redbook at 8:55 a.m.
Industrial Production at 9:15 a.m.
Housing Market Index at 10 a.m.
Four-Week Bill Auction at 11:30 a.m.
Treasury International Capital at 4 p.m.
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