Dow Jones Today Dips on News China May Stop Buying U.S. Debt

Garrett Baldwin

The Dow Jones today will likely pull back today after six straight days of new stock market highs.

Dow futures are down 89 points this morning, as markets appear spooked about a report that China may halt U.S. Treasury purchases. This is exactly the type of news that sends gold prices higher. Here's why you should buy gold now, before it goes "digital" and packs on more gains.

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.

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The Top Stock Market Stories for Wednesday

• A report out of China said the nation is considering a plan to stop buying U.S. Treasury bonds. The report indicates that the world's largest purchaser of U.S. sovereign debt is starting to think U.S. debt is less attractive compared to other assets. Both nations are experiencing ongoing tensions surrounding trade and military presence across Southeast Asia. The news pushed bond prices and safe-haven assets, like gold, to higher levels.

• Gold prices are off to a hot start in 2018. Billionaire investor and CEO of DoubleLine Capital Jeffrey Gundlach predicted Tuesday that the S&P 500 will close the year out in the negative. The bearish manager argued that commodities will be the best asset class in 2018, a sentiment that bodes well for precious metals like gold and silver. Gold is setting up to be an excellent investment as we move into 2018.

• Crude oil prices pushed to their highest levels since 2014 despite news that U.S. production isn't slowing down. U.S. output is slated to top 10 million barrels per day in the months ahead; however, rising geopolitical concerns and a united effort by OPEC to cap excessive production have helped propel crude prices higher. The WTI crude oil price today added 0.3%. Brent crude gained 0.3%.

• All a company needs to do to make its stock price surge is to announce it's working on implementing blockchain technology. That's the story for Eastman Kodak Co. (NYSE: KODK). The embattled photography firm saw its stock surge nearly 120% Tuesday thanks to announcing a "major blockchain initiative." The firm announced plans to help photographers license their work and collect royalty payments through the adoption of digital ledgers. The news comes just a few days after Kodak stock hit an all-time low of $3.05 on Jan. 4. After yesterday's surge, the stock is now up more than 61% in pre-market hours.

Four Stocks to Watch Today: LEN, KBH, BABA, DPZ

• Shares of Lennar Corp. (NYSE: LEN) fell nearly 2% after the home builder fell well short of Wall Street earnings expectations this morning. Lennar reported earnings of $1.29 per share, a figure that was well below the $1.48 expected by Wall Street. The firm did report stronger revenue and said that the recent tax reform bill will provide relief to the company. Lennar's effective tax rate will now decline from 34% to 25%. The earnings reports continue in the housing sector after the bell Wednesday. KB Home (NYSE: KBH) is expected to report earnings per share of $0.77 on top of $1.358 billion in revenue.

• Domino's Pizza Inc. (NYSE: DPZ) has been one of the top performers over the last five years, with its stock rising more than four times. But on Wednesday, the price of DPZ stock was off nearly 5%. The firm's CEO, who led a successful turnaround strategy in recent years, will be stepping down.

• Keep an eye out for news on Alibaba Holding Group Ltd. (NYSE: BABA). The company's founder, Jack Ma, said Monday that the Chinese e-commerce giant is seriously considering a listing on the Hong Kong Stock Exchange. Alibaba has generated a stream of headlines over recent days, but the one that investors really want to know about is the cryptocurrency TRON. Investors are wondering if TRON will announce that it is partnering with Alibaba on a major blockchain initiative.

• Look for additional earnings reports from SUPERVALU Inc. (NYSE: SVU), MSC Industrial Direct Co. (NYSE: MSM), and Progress Software Corp. (Nasdaq: PRGS).

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

• MBA Mortgage Applications at 7 a.m.
• Import and Export Prices at 8:30 a.m.
• Chicago Fed Bank President Charles Evans speaks at 9 a.m.
• Dallas Federal Reserve Bank President Robert Kaplan speaks at 9:10 a.m.
• Atlanta Fed Business Inflation Expectations at 10 a.m.
• Wholesale Trade at 10 a.m.
• EIA Petroleum Status Report at 10:30 a.m.
• 10-Year Note Auction at 1 p.m.
• Louis Fed Bank President James Bullard Speaks at 1:30 p.m.

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Garrett Baldwin

About the Author

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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.

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