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The Dow Jones today continues its record-breaking streak as JPMorgan CEO Jamie Dimon says 4% GDP growth is possible this year with the new tax plan.
Dow futures are up 102 points this morning as investors find new confidence in this bear-punishing bull market. The prospect of 4% GDP growth provides a fundamental underpinning to this record-breaking stock market. Click here to find out what Wall Street is planning to get away with as earnings season gets underway…
Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
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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 Five Top Stock Market Stories for Wednesday
- After weeks of debate about tax reform, immigration reform, and spending bills, the U.S. Senate finally approved U.S. Federal Reserve Gov. Jerome Powell to succeed Janet Yellen at the helm of the U.S. central bank. Yellen has become the first Fed chair to not serve two terms. Powell becomes the 16th chair of the Fed and will inherit a central bank that is dealing with a $4.5 trillion balance sheet and speculation about more interest rate hikes in the year ahead. The final vote of Powell's confirmation came in at 85 in favor to 12 opposed.
- The World Economic Forum continues in Davos, Switzerland, today. And today's controversial star is U.S. Treasury Secretary Steven Mnuchin, who might have single-handedly pushed gold prices up 1% this morning. Gold prices jumped after Mnuchin told an audience the United States was open for business and that the country welcomed a weaker dollar, which would make American exports more affordable around the globe. Gold prices jumped to nearly $1,350 per ounce as traders weighed the possibility of further weakness for the greenback and concerns about a looming global trade war that could increase inflation. U.S. President Donald Trump will speak in Davos on Friday morning.
- Speaking of Davos, today will feature another busy day of speeches from corporate and political leaders around the globe. The key themes this year are global trade, rising economic inequality, and market performance. Today, Alphabet Inc. (Nasdaq: GOOGL) CEO Sundar Pichai, Alibaba Group Holding Ltd. (NYSE: BABA) founder Jack Ma, and U.S. Secretary of Energy Rick Perry will speak.
- The manager of the world's largest hedge fund has a bullish message to investors. Ray Dalio says that he anticipates a melt-up of stock and said that investors who are holding cash are going to feel pretty stupid in the future. Dalio says that the economy is poised to receive a big jolt from the current tax laws. He anticipates that investors are going to chase equities for bigger gains. Investors looking for the top stocks that would benefit should read Bill Patalon's latest update on Davos and what stocks are the best to accumulate in the year ahead. These are the must-own "buy-and-hold" companies.
- Despite warnings of a weaker U.S. dollar, crude oil prices were mixed Wednesday morning. The lackluster movement came on news that U.S. inventories unexpectedly increased last week, according to the American Petroleum Institute. Look for an official report on U.S. oil stocks later this morning from the Energy Information Administration. The WTI crude oil price today added 0.2%. Brent crude dipped 0.2%.
Three Stocks to Watch Today: GE, CMCSA, JPM
- Shares of General Electric Co. (NYSE: GE) added two points in pre-market hours despite news that the company fell short of Wall Street earnings expectations. The company reported earnings per share (EPS) of $0.27 on top of $31.4 billion in revenue. Wall Street expected EPS of $0.28 on top of $32.8 billion in revenue. General Electric is currently experiencing its worst one-week performance since the height of the financial crisis. The stock has lost nearly 45% of its value since President Trump took office.
- Shares of Comcast Corp. (Nasdaq: CMCSA) added 0.7% after the company topped Wall Street earnings expectations. The firm said EPS came in at $0.49 on top of $21.9 billion in revenue. Consensus analyst expectations called for per-share earnings of $0.47 on top of $21.8 billion. The company also announced it was adding 350,000 new high-speed Internet customers.
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- JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon predicted that the recent tax reform law will bolster U.S. wages and inflation. In an interview with CNBC this morning from Davos, Dimon forecasted that the media will begin to worry about inflation and wages increasing too quickly in the future. The bank executive also laid out the case that the recent tax bill could bolster U.S. GDP growth to 4% this year. "I can't believe that people think having an uncompetitive tax system is a good thing," he said. Earlier this week, JPMorgan announced it was spending $20 billion over the next five years to open new branches and bolster pay for its employees.
- Look for additional earnings reports from Ford Motor Co. (NYSE: F), F5 Networks Inc. (Nasdaq: FFIV), Las Vegas Sands Corp. (NYSE: LVS), Royal Caribbean Cruises (NYSE: RCL), United Technologies Corp. (NYSE: UTX), Whirlpool Corp. (NYSE: WHR).
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- FHFA House Price Index at 9 a.m.
- PMI Composite Flash at 9:45 a.m.
- Existing Home Sales 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.
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About the Author
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.