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The Dow Jones today is down more than 200 points in pre-market hours after White House economic advisor Gary Cohn announced his resignation.
Cohn resigned in the wake of U.S. President Donald Trump's decision to move forward with plans to place tariffs on steel and aluminum imports. His departure is likely to boost the prominence of protectionist economic policy in the White House.
The market's recent volatility is likely to continue as investors mull the possibility of a full-blown trade war. However, we think Wall Street is reading volatility all wrong – in fact, we're planning to profit from it…
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.
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The Top Stock Market Stories for Wednesday
- With Gary Cohn's departure from the White House, University of California-Irvine economics Professor Peter Navarro is likely to dictate much of the trade policy put forward by President Trump. Navarro is a staunch opponent of Chinese trade and will likely encourage Trump to reexamine much of the existing global trade order, including the role of the World Trade Organization. Gary Cohn's resignation has rattled much of the financial establishment, which now believes that we are on the verge of a significant international trade war.
- Goldman Sachs Group Inc. (NYSE: GS), the global investment bank once run by Gary Cohn, has weighed in on the impact of steel and aluminum tariffs on U.S. companies. Goldman projects that both U.S. automotive giants General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F) could both take a $1 billion loss due to the president's proposed tariffs. Given the significant amount of raw resources imported by the United States and the lack of capacity to meet domestic demand, U.S. manufacturers could see a steep rise in raw materials soon. Shares of GM and Ford stock were both off roughly 2% this morning.
- Yesterday, we noted that former hedge fund manager and pharmaceutical executive Martin Shkreli will pay $7.36 million in fines due to his securities fraud. His forfeiture of assets may include a Picasso painting and a rare Wu-Tang Clan album. Shkreli will be sentenced on Friday, and U.S. prosecutors have indicated that they are seeking a very stiff sentence. Citing e-mails that suggest his disdain for the justice system, prosecutors are seeking up a 15-year prison sentence.
- Gold prices slid this morning after the decision by Cohn to cut ties with the Trump White House. Crude oil prices dipped Wednesday morning as concerns about a trade war rattled traders across the sector. The WTI crude oil price today added 0.2%. Brent crude dipped 0.2%.
Three Stocks to Watch Today: CAT, BA, AMZN
- Shares of Caterpillar Inc. (NYSE: CAT) and Boeing Co. (NYSE: BA) were both off more than 2% this morning in the wake of Cohn's resignation. Due to the proposed tariffs, both companies are likely to face a sharp rise in the cost of the raw materials necessary for their products.
- Amazon.com Inc. (Nasdaq: AMZN) made a splash this week after announcing plans to explore banking accounts for its consumers. According to a report by consulting firm Bain, Amazon could become the nation's third-largest banking institution if it entered the financial services space. The report notes that by entering the financial industry, the firm could avoid roughly $250 million a year in credit card fees.
- Look for additional earnings reports from Costco Wholesale Corp. (Nasdaq: COST), Abercrombie & Fitch Co. (NYSE: ANF), Dollar Tree Inc. (Nasdaq: DLTR), Thor Industries Inc. (NYSE: THO), Casey's General Stores Inc. (Nasdaq: CASY), CryoLife Inc. (NYSE: CRY), Vivint Solar Inc. (Nasdaq: VSLR), and Momo Inc. (Nasdaq: MOMO).
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- Atlanta Federal Reserve Bank President Raphael Bostic Speaks at 8 a.m.
- ADP Employment Report at 8:15 a.m.
- New York Fed Bank President William Dudley speaks at 8:20 a.m.
- International Trade at 8:30 a.m.
- Productivity and Costs at 8:30 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Beige Book at 2 p.m.
- Consumer Credit 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.