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The Dow Jones today popped more than 400 points in pre-market hours as trade war fears were eased by new commentary from the Treasury department. Over the weekend, U.S. Treasury Secretary Steve Mnuchin said he was "cautiously hopeful" that China and the United States could come to a trade agreement to avoid the need for tariffs.
Chances are your investments took a substantial hit when the market lost $768 billion in market value last week. Money Morning Chief Investment Strategist Keith Fitz-Gerald took a close look at the catalysts behind the drop and has some guidance for what going to happen next. Check it out here...
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Now here's a closer look at today's most important market events and stocks, plus Monday's economic calendar.
The Five Top Stock Market Stories for Monday
- According to reports, China is willing to hold talks to prevent the implementation of tariffs or a trade war with the United States. The Wall Street Journal reported Sunday that the two countries were planning negotiations. Last week, U.S. President Donald Trump announced tariffs on up to $60 billion in Chinese imports as punishment for violations of intellectual property rights. China responded by laying out plans to place tariffs on 128 American products, but said it would hold off while it worked on a deal to prevent escalation of trade barriers.
- Markets are looking to rebound from their worst week since January 2016. Last week, markets reacted negatively to an uptick in interest rates, fears of an escalating trade war, and a huge slump in tech stocks fueled by the fallout of Facebook's data scandal. Today, investors will be looking for some reassurance from two members of the U.S. Federal Reserve. New York Fed Bank President William Dudley and Cleveland Fed Chief Loretta Mester, both voting members on the FOMC, will speak on Monday.
- Shareholders and customers of Facebook Inc. (Nasdaq: FB) are growing disillusioned with the company. Recent public opinion polls show that both Americans and Germans are upset with the social media company's management of private data. Apparently, CEO Mark Zuckerberg's public apology has failed to stir much compassion for the organization. Last week, Facebook lost roughly $75 billion in market capitalization.
- Gold prices were slightly lower Monday, as markets speculated on trade talks between the United States and China. Gold prices were hovering at a five-week high over the weekend. The combination of trade war fears and President Trump's nomination of John Bolton as national security advisor generated a lot of buzz last week and pushed gold prices higher. Bolton is a notorious war hawk who has previously advocated for military intervention in both Iran and North Korea. Some gold traders believe that Bolton may advise Trump to engage in a lengthy military campaign should tensions escalate.
- Crude oil prices were mixed this morning as markets digested trade tensions and concerns about geopolitical uncertainty in the Middle East. Markets are once again speculating on tensions between Saudi Arabia and Iran. Over the weekend, Saudi air defenses shot down rockets fired by an Iran-based militia based in Yemen. Several of the rockets had targeted the Saudi capital. The WTI crude oil price today added 0.1%. Brent crude gained 0.1%.
Stocks to Watch Today: BA, FINL, MSFT
- Shares of Boeing Co. (NYSE: BA) are on the move after the company delivered its first 787-10 Dreamliner jet to its customer, Singapore Airlines, this past weekend. Boeing has been the subject of much speculation in recent days, as concerns about a possible trade war are weighing on investor sentiment.
- Apparel giant Finish Line Inc. (Nasdaq: FINL) will sell itself to British sports retailer JD Sports Fashion. Shares of FINL stock popped nearly 30% this morning on news that it would sell itself for $558 million.
- Shares of Microsoft Corp. (Nasdaq: MSFT) added nearly 3% after it received a bullish price outlook from investment bank Morgan Stanley (NYSE: MS). The Wall Street firm hiked its price target for MSFT by $20 to $130. Morgan Stanley predicts that Microsoft could one day be worth $1 trillion in market capitalization thanks to stronger margins and widespread adoption of cloud computing applications.
- Look for earnings reports from Red Hat Inc. (NYSE: RHT), Paychex Inc. (Nasdaq: PAYX), WageWorks Inc. (Nasdaq: WAGE), and Sky Solar Holdings Ltd. (Nasdaq: SKYS).
Monday's U.S. Economic Calendar (all times EDT)
- Chicago Fed National Activity Index at 8:30 a.m.
- Dallas Fed Manufacturing Survey at 10:30 a.m.
- Four-Week Bill Announcement at 11 a.m.
- Three-Month Bill Auction at 11:30 a.m.
- Six-Month Bill Auction at 11:30 a.m.
- New York Fed Bank President William Dudley speaks at 12:30 p.m.
- Two-Year Note Auction at 1 p.m.
- Cleveland Fed Bank President Loretta Mester speaks at 4:30 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.