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The Dow Jones today locked in a 190-point gain in Monday's pre-market trading as investors turned away from geopolitical chatter to focus on a busy week of earnings reports. Markets are anticipating the most profitable earnings season in seven years thanks to 2017 tax cut legislation. Still, ongoing tensions in Washington and abroad could drive the market sideways at any point.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
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Now here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
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Money Morning Insight of the Day
Earnings season is now in full swing, with today's key reports from Bank of America Corp. (NYSE: BAC), Netflix Inc. (Nasdaq: NFLX), and more. Thanks to tax cuts, expectations are high. Analysts expect profit growth to top 18%, which would be the biggest jump in seven years. But there are a few bearish trends that are still lurking in the market. And if you're serious about making money, you need to know how to harness them and target individual stocks for life-changing gains. Money Morning Quantitative Specialist Chris Johnson explains.
The Top Stock Market Stories for Monday
- Investors are concerned that the nation's recent military strike in Syria could escalate the already tense situation between the United States and Russia. U.S. Ambassador to the UN Nikki Haley said yesterday that the U.S. Treasury Department will impose additional sanctions against Russian entities as an additional punishment for Russia's continued support of the Syrian government.
- The ongoing trade rift between the United States and China continues to plague international markets. Despite reports that both countries are working behind the scenes to prevent additional detrimental trade policies, both countries recently proposed tens of billions in new tariffs on one another. The United States has accused China of widespread intellectual property theft, while China has accused the United States of unfair trade practices, including price manipulation in the agricultural industry. This morning, it's worth noting that proposed tariffs on U.S. business jets will likely not provide a competitive advantage to foreign competition. Reuters reports that Chinese aviation executives do not see the layer of protectionism as a way to bolster the nation's local market. Check back to Money Morning today for more insight on how the ongoing trade war could affect your investments.
- Finally, investors will continue to monitor ongoing developments in Washington around the presidency of Donald Trump. The White House has asked a federal judge to block prosecutors from reviewing any files seized from his lawyer's office during a raid by the FBI last week. The agency seized a trove of documents from lawyer Michael Cohen's office as part of an investigation into a payment of hush money. The spat between the White House and the FBI continues a day after former FBI Director James Comey called Trump "morally unfit to be president."
Three Stocks to Watch Today: BAC, NFLX, AAPL
- Shares of Bank of America Corp. (NYSE: BAC) added nearly 1% after the nation's largest bank by deposits topped Wall Street earning expectations. The financial institution leads a busy day of earnings reports on Wall Street and hopes to keep its positive momentum from previous quarters. The firm reported earnings per share of $0.62 on top of $23.27 billion in revenue. That topped expectations of $0.59 on top of $22.91 billion thanks to strong growth in its consumer loan business and the recent U.S. tax reform.
- Shareholders of Netflix Inc. (Nasdaq: NFLX) are expecting a blockbuster earnings report when the digital streaming giant reports quarterly results after the bell. The stock is up more than 60% over the last year, and analysts are projecting reasons for an even higher surge. Projections call for a 60% jump in profit year over year. They also expect that the company added 7.5 million customers this quarter. The expectations are high… can Netflix live up to the hype? Check back with Money Morning for more insight on NFLX stock.
- Apple Inc. (Nasdaq: AAPL) is generating some buzz report thanks to a report over a "gold iPhone." According to regulatory filings, the company had designed a gold-colored rendition of its iPhone X. However, the firm has not released it, according to a filing with the Federal Communications Commission. The news came right after an AAPL analyst at KGI Securities said in a research note that a "blush gold" iPhone X would face production challenges. Based on reports, it is unclear if the firm will ever release a device in this color. However, it may release three devices with larger batteries this year.
- Look for additional earnings reports from Charles Schwab Corp. (Nasdaq: SCHW), JB Hunt Transport Services Inc. (Nasdaq: JBHT), and Clear Channel Outdoor Holdings Inc. (NYSE: CCO).
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.