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Editor's Note: Yesterday, Jerome Powell gave his first press conference as Federal Reserve chair. While much of Wall Street is focused on his interest rates commentary, Money Morning Capital Wave Strategist Shah Gilani wants you to know they're way off the mark. In fact, the Powell's most important comments weren't about interest rates at all…
The Dow Jones today projected a 300-point loss in pre-market trading as trade relations between China and the United States continue to deteriorate. Today, U.S. President Donald Trump is slated to make a major announcement on additional tariffs targeting Chinese imports. China, hinting at strong retaliation, formerly accused the United States of promoting an abusive trade policy.
The market has trended downward for much of the week. However Money Morning Liquidity Specialist Lee Adler is seeing tremendous profit opportunity, especially in gold. Check out his four unique profit plays here…
Here are the numbers from Wednesday 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 Thursday's economic calendar.
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The Top Stock Market Stories for Thursday
- Today, President Trump will announce new tariffs aimed at tackling China's possible theft of American intellectual property. Though the new restrictions will not focus on Chinese capital flows or student visas, the administration will aim to put new tariffs on about $60 billion in Chinese goods. The White House said yesterday that the tariffs are in response to an investigation into "China's state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property."
- Investors are digesting the Fed's decision to raise interest rates for the first time in 2018. The central bank hiked rates by 25 basis points – a target that was expected by mainstream economists. Fed Chair Jerome Powell issued a bullish outlook on the U.S. economy and hiked the central bank's GDP outlook for 2018 to 2.7% from 2.5%. Powell did say that ongoing trade policy in Washington remains a key concern for central bank officials, but not enough yet to alter their outlook for the U.S. economy. The Fed is likely to raise interest rates three times this year.
- Crude oil prices ticked lower despite a surprise drawdown in U.S. crude inventory levels. The Energy Information Administration reported that U.S. inventory levels fell by 2.6 million barrels while U.S. crude production topped 10.4 million barrels last week. Rising production raises concerns about a supply-demand imbalance around the globe. The WTI crude oil price today fell 0.4%. Brent crude dipped 0.4%.
- Gold prices rose to $1,329 per ounce after the Fed Chair Powell announced the hike on U.S. interest rates. Powell said that the Fed was poised to raise rates three times this year, and not four times, as many economists had expected. Meanwhile, markets are still monitoring a string of geopolitical concerns around the globe, ranging from U.S. trade policy to Iran's consideration of a nuclear weapons program.
Three Stocks to Watch Today: FB, FIVE, NKE
- Mark Zuckerberg has apologized for the ongoing scandal plaguing Facebook Inc. (Nasdaq: FB). The CEO discussed the significant breach of consumer data by Cambridge Analytica, which exposed information of 50 million users. Facebook stock has plunged in recent days, and calls have intensified for Zuckerberg to testify before Congress. In company statements released Wednesday, Facebook executives outlined new actions it will take to ensure the safety of customer data in the future. FB stock is up 3% Thursday.
- Shares of Five Below Inc. (Nasdaq: FIVE) popped more than 1% after the firm beat Wall Street earnings expectations for the fourth quarter. The firm also topped analysts' expectations with its Q1 forecast. The firm reported earnings per share (EPS) of $1.18 on top of $504.3 million in revenue. Analysts projected EPS of $1.17 on top of $501.5 million.
- Shares of Nike Inc. (NYSE: NKE) are front and center among a busy day of earnings reports. Nike has topped earnings expectations for the past six quarters. However, this quarter Wall Street expects a year-over-year quarterly EPS decline by 23.5%, to $0.52. Revenue expectations are set for $8.83 billion.
- Look for additional earnings reports from Micron Technology Inc. (Nasdaq: MU), Carnival Corp. (NYSE: CCL), Darden Restaurants Inc. (NYSE: DRI), Accenture Plc. (NYSE: ACN), Conagra Brands Inc. (NYSE: CAG), KB Home (NYSE: KBH), Cintas Corp. (Nasdaq: CTAS), Cato Corp. (Nasdaq: CATO), and Lands' End Inc. (Nasdaq: LE).
Thursday's U.S. Economic Calendar (all times EDT)
- Jobless Claims at 8:30 a.m.
- FHFA House Price Index at 9 a.m.
- PMI Composite Flash at 9:45 a.m.
- Bloomberg Consumer Comfort Index at 9:45 a.m.
- Leading Indicators at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- Kansas City Fed Manufacturing Index at 11 a.m.
- Three-Month Bill Announcement at 11 a.m.
- Six-Month Bill Announcement at 11 a.m.
- 52-Week Bill Announcement at 11 a.m.
- Two-Year FRN Note Announcement at 11 a.m.
- Two-Year Note Announcement at 11 a.m.
- Five-Year Note Announcement at 11 a.m.
- Seven-Year Note Announcement at 11 a.m.
- 10-Year TIPS Auction at 1 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 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.