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The Dow Jones today slips for the second day this week as investor uncertainty rises ahead of a major week of events for the stock market.
Dow futures are down 248 points this morning as the CBOE Volatility Index (VIX) reached its highest level since Q4 2016. The VIX provides the market's volatility implied by S&P 500 stock options. It's referred to as the stock market "fear gauge."
However, there's no need to panic – healthy stock rallies require pullbacks. Here's a glimpse into the Wall Street underworld, which is far more concerning…
Here are the numbers from Monday 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 Tuesday's economic calendar.
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The Five Top Stock Market Stories for Tuesday
- Today, the Fed Open Market Committee kicks off its first meeting of 2018, and there will be plenty of questions asked about the U.S. central bank. New U.S. Federal Reserve Chair Jerome Powell will take over the central bank at a time when the economy is humming along and a sea of calm has taken over the markets. But there are challenges on the horizon, including increased U.S. deficits, the Fed's $4.5 trillion balance sheet, and three expected rate hikes in 2018.
- This evening, U.S. President Donald Trump will deliver his first State of the Union address, and it will likely be a divisive evening on cable news channels. Trump is expected to tout Republicans' recent tax reform efforts, the market's big rally, and his recent proposal on immigration policy.
- Tax reform has fueled an incredible surge of investment planning and pay hikes across the country. Firms ranging from JPMorgan Chase & Co. (NYSE: JPM) to The Home Depot Inc. (NYSE: HD) and State Farm Insurance to The Walt Disney Co. (NYSE: DIS) have announced one-time bonuses for their employees. The latest company to shed news on investment is Exxon Mobil Corp. (NYSE: XOM). The energy giant announced plans to invest up to $50 billion over the next five years on projects thanks to the tax bill.
- Gold prices are pushing higher. The price of gold touched $1,347 as markets monitor the strength of the U.S. dollar and the string of geopolitical challenges around the globe. Gold is sitting near a two-year high for one reason: President Trump. And here's where the price is heading next.
- Crude oil prices faced new pressures Tuesday from a stronger U.S. dollar and news that domestic production continues to rise. Analysts anticipate that the United States will hit 10 million barrels per day in 2018, surpassing output of both Russia and Saudi Arabia. American producers have been exploiting gains produced by OPEC's commitment to lowering excess production around the globe. The WTI crude oil price today dipped 0.8%. Brent crude was off 0.4%.
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- Shares of McDonald's Corp. (NYSE: MCD) are in focus after the fast food giant reported quarterly earnings before the bell. Consensus expectations called for earnings per share (EPS) of $1.59 on top of $5.26 billion in revenue. The company reported EPS of $1.71 on top of $5.34 billion.
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- Drug giant Pfizer Inc. (NYSE: PFE) reported fourth-quarter earnings before the bell. Wall Street analysts projected EPS of $0.56 on top of $13.06 billion in revenue. The company reported EPS of $0.62 on top of $13.7 billion in revenue. PFE stock was still off 1.3% due to exposure to the broader market downturn. Still, the company did report a positive 2018 outlook and announced plans to provide employees with one-time bonuses in the wake of the tax reform bill.
- Aetna Inc. (NYSE: AET) will be a major topic of discussion beyond its planned merger with CVS Health Corp. (NYSE: CVS). The health insurance giant reported earnings before the bell. Wall Street expected EPS of $1.18 on top of $14.89 billion in revenue. The company topped EPS expectations by reporting $1.25. However, it fell slightly short of analysts' revenue expectations. Shares of AET were off 2% in pre-market hours.
- Keep an eye out for additional results from Advanced Micro Devices Inc. (NYSE: AMD), Electronic Arts Inc. (Nasdaq: EA), Juniper Networks Inc. (Nasdaq: JNPR), Illumina Inc. (Nasdaq: ILMN), Harley-Davidson Inc. (NYSE: HOG), Corning Inc. (NYSE: GLW), Pentair Inc. (NYSE: PNR), AK Steel Holding Corp. (NYSE: AKS).
Tuesday's U.S. Economic Calendar (all times EST)
- Redbook at 8:55 a.m.
- S&P Corelogic Case-Shiller HPI at 9 a.m.
- Consumer Confidence at 10 a.m.
- State Street Investor Confidence Index at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- 52-Week Bill Auction at 11:30 a.m.
- Farm Prices at 3 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.