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The Dow Jones today traded sharply higher in pre-market hours after the Trump administration announced it would block Broadcom Ltd.'s (Nasdaq: AVGO) hostile takeover bid of American-based semiconductor company Qualcomm Inc. (Nasdaq: QCOM). Markets also rose on news that the Consumer Price Index indicated lower-than-expected rates of inflation.
Lower rates of inflation are taking many investors by surprise. However, we're using the sudden reprieve to position our portfolios for one of 2018's most exciting profit plays in gold...
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 Wednesday's economic calendar.
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The Five Top Stock Market Stories for Tuesday
- This morning, the U.S. Department of Commerce reported that February consumer prices increased by 0.2%. That number was in line with economists' expectations and a sign that inflation levels remained largely in check last month. Wall Street expected that the U.S. Federal Reserve would have accelerated plans for interest rate hikes should this figure have been higher. The central bank is expected to raise interest rates three or four times in 2018.
- The Trump administration has blocked a possible $117 billion merger bid by Broadcom Ltd. (Nasdaq: AVGO) to acquire semiconductor giant Qualcomm Inc. (Nasdaq: QCOM). On Tuesday, Trump stated that his administration had "credible evidence" that Broadcom "might take action that threatens to impair the national security of the United States." Broadcom shares were flat after the company said that it strongly disagrees with the decision. Shares of QCOM stock fell roughly 5% on the news.
- The price of gold was off about 0.1% in pre-market hours, as investors eyed this month's report on inflation. An ounce of gold costs roughly $1,319.50. Although today's Consumer Price Index was in line with expectations, it's still important to note that inflation levels are rising. Money Morning Resource Specialist Peter Krauth explains that inflation is only going to push the price of gold higher. In fact, he has set an aggressive price target for gold in the year ahead. Click here to see where Peter sees gold prices in 2018.
- The price of Bitcoin hovered just north of $9,000 as regulators continue to crack down on cryptocurrencies. On Friday, the People's Bank of China Governor Zhou Xiaochuan took aim at cryptocurrency platforms that have changed their goals to promote market speculation on coins and tokens. Here's more on what is driving cryptocurrency prices over the last 24 hours.
- Crude oil prices were flat Tuesday as investors prepared for monthly inflation data. Yesterday, the Energy Information Administration announced that U.S. shale oil output is expected to push to 6.95 million barrels per day. That's about a 130,000 barrel-per-day increase from the March record. The agency also projects that total U.S. crude output will surpass 11 million barrels per day in 2018. The WTI crude oil price today added 0.1%. Brent crude dipped 0.1%.
Three Stocks to Watch Today: DKS, SFIX,
- Shares of Dick's Sporting Goods Inc. (NYSE: DKS) are in focus as the retail giant prepares to report quarterly earnings before the bell. Wall Street expects that the company will report quarterly earnings of $1.22 on top of $2.72 billion in revenue. The company recently generated a lot of publicity after announcing that it will not sell semi-automatic rifles to any person under the age of 21. Expect analysts to ask a series of questions during the company's quarterly conference call.
- Shares of Stitch Fix Inc. (Nasdaq: SFIX) added nearly 7% in pre-market hours after the company topped Wall street earnings expectations. Even though the company fell short of revenue expectations, the firm greeted analysts with a stronger outlook than many expected. In addition, the company announced the release of roughly 38 million new shares eligible for public trading on Monday afternoon.
- General Electric Co. (NYSE: GE) is generating some buzz this morning after the company announced plans to cut executive bonuses for the first time in company history. The 126-year-old firm said that the decision is part of a broader goal to reign in spending after the firm lost money in 2017. Last year, the company's CEO, John Flannery, received $9 million in salary and other compensation. According to Retuers, GE has axed any potential bonus Flannery could receive for his efforts this year.
- Look for additional earnings reports from DSW Inc. (NYSE: DSW), HD Supply Holdings (NYSE: HDS), Clean Energy Fuel Corp. (Nasdaq: CLNE), Caleres Inc. (NYSE: CAL), AZZ Inc. (NYSE: AZZ), and Team Inc. (Nasdaq: TISI)
Tuesday's U.S. Economic Calendar (all times EDT)
- NFIB Small Business Optimism Index at 6 a.m.
- Consumer Price Index at 8:30 a.m.
- Redbook at 8:55 a.m.
- Four-Week Bill Auction at 11:30 a.m.
- 30-Year Bond 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.