The Dow Jones today is flat in pre-markets hours after Democrats swept to victory in Virginia and New Jersey during statewide elections last night.
Dow Jones futures are down nine points as traders are now uncertain over what the elections will mean for Congress, especially as the House gears up for its election in 2018.
Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
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
- While U.S. President Donald Trump is on tour in Asia, he has taken a minute to thump his chest about the performance of the stock market. Trump recently took personal responsibility for the stock market's incredible run over the last year in a statement to the White House press pool. That said, Trump's presidential brand took a bit of a hit yesterday after Democrats easily swept the races in Virginia for governor, lieutenant governor, and attorney general. A Democrat also won the races for governor's mansion in New Jersey.
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- The elections last night are raising uncertainty thanks to the glacial pace of tax reform on Capitol Hill. Last week, House Republicans unveiled a plan to slash the corporate tax rate from 35% to 20%. However, to pay for the cuts, Congress wants to slash a series of tax breaks that are favored by special interest groups scattered throughout Washington. Lobbying will heat up in the days ahead as markets anticipate a Senate tax bill to arrive very soon. Tax reform has been a central catalyst of optimism for investors during the Trump rally. However, Reuters reported this morning that the Senate may consider a one-year delay to any major corporate tax cuts due to the complexity of the chamber's rules on policymaking. In short, to pass the bill in the Senate without the threat of a filibuster, it will have to add less than $1.5 trillion to the deficit over the next ten years. Delaying some of the tax breaks could help the bill stay under that limit.
- While Trump is in Asia, markets are keeping a close eye on North Korea. Trump's first trip to China and Japan has brought him closer than ever to the world's leading nuclear threat. Trump has expressed tough rhetoric against Kim Jong Un in recent days, including the warning "Do not underestimate us, do not try us." Still, Trump has called for North Korean leaders to come to the table and strike a deal over their nuclear program.
- As we noted yesterday, the Saudi government has detained dozens of the nation's richest executives, princes, and other people of influence under a widespread crackdown on corruption in the nation. Questions will be asked when reporters start to follow the money. According to reports, the Saudi Government, already facing a massive budget problem, is looking to confiscate cash and assets of certain individuals that are valued as high as $800 billion. But one of the most interesting developments is whether President Trump is using the crackdown to have the Saudi Aramco IPO held in the United States...
- Crude oil prices dipped slightly this morning as traders continue to monitor geopolitical tensions in the Middle East. In addition to the Saudi political purge, traders are eyeing the proxy war between the Saudis and Iran. Though these tensions have helped push oil prices higher in recent days, a new report citing concerns about Chinese demand has weighed a bit on trader sentiment. The WTI crude oil price today fell 0.4%. Brent crude dipped 0.4%.
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- Shares of Snap Inc. (NYSE: SNAP) plunged nearly 12% in pre-market hours after the company report a huge revenue miss and stated that the number of daily active users was off from analysts' expectations. The company has seen its value erode since a few days after its IPO earlier this year. The stock had actually lost more than what the board said this morning. It has shown a slight recovery on news that Chinese social media giant Tencent Holdings Ltd. (OTCMKTS: TCEHY) purchased a 10% stake in Snap this morning.
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- Will doubling the characters help Twitter Inc. (NYSE: TWTR) double its price? The social microblogging site saw its shares add 1.4% on news that it has expanded the number of characters that users can type from 140 to 280. TWTR stock is flirting with $20.00 per share.
- Look for additional earnings reports from Monster Beverage Corp. (Nasdaq: MNST), Square Inc. (NYSE: SQ), Regeneron Pharmaceuticals Inc. (Nasdaq: REGN), MGM Resorts International (NYSE: MGM), The Wendy's Co. (NYSE: WEN), Albermarle Corp. (NYSE: ALB), Wolverine World Wide Inc. (NYSE: WWW), InterActiveCorp (NYSE: IAC), Twilio Inc. (Nasdaq: TWLO), and Global Payments Inc. (NYSE: GPN)
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- 10-Year Note Auction at 1 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.