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The Dow Jones today jumped 200 points in pre-market trading, as bullish investors reacted to stellar earnings reports from Netflix Inc. (Nasdaq: NFLX) and Goldman Sachs Group Inc. (NYSE: GS). Markets are likely to continue to rise on what is expected to be the strongest earnings season in seven years - largely due to strong consumer confidence and the recent tax reform law.
With earnings season in full swing, there is no better time to explore the immense profit potential of dividend stocks. In fact, Money Morning Chief Investment Strategist Keith Fitz-Gerald believes that dividend stocks are one of the best investments you can make - they essentially provide an entirely additional income stream for investors. In the run-up to earnings season, Keith put together a list of his favorite dividend stocks - check them out here...
Here are the numbers from Monday 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 Wednesday's economic calendar.
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Money Morning Insight of the Day
Earnings season is now in full swing, with today's key reports from International Business Machines Corp. (NYSE: IBM), Johnson & Johnson (NYSE: JNJ), and Intuitive Surgical Inc. (Nasdaq: ISRG). 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 Tuesday
- While investors have plenty to celebrate this earnings season, geopolitical storm clouds remain on the horizon. China hit U.S. farmers with a 179% tariff on shipments of the feed and distillery grain sorghum in retaliation for the United States flooding the Chinese market with the crop. China says that its decision is based on an investigation into the subsidies practices of the United States and claims that unfair support for the crop is hurting Chinese producers. The announcement came a day after the United States. banned one of China's largest technology firms, ZTE, from purchasing components from American producers.
- Market fears of an escalating Middle Eastern conflict abated thanks to last week's military strikes against the Syrian government. On Friday, April 13, U.S. forces joined the United Kingdom and France in retaliation for a chemical gas attack carried out by the Syrian government. The military exercise came at a time that tensions are also rising in the Middle East between Saudi Arabia and Iran.
- Today, several members of the U.S. Federal Reserve will be speaking at events around the globe, including San Francisco Fed President John Williams and Chicago Fed Bank President Charles Evans. But no one will be more watched today than Fed Gov. Randal Quarles, who will testify before the U.S. House Financial Services Commission. Quarles will provide testimony on the central bank's plans to regulate and oversee the financial system. Expect a wealth of questions about the Fed's plans to raise interest rates and manage its massive balance sheet. Money Morning Liquidity Specialist Lee Adler offers you advice on how to play the Fed's problems, right here.
Four Stocks to Watch Today: GS, NFLX, TSLA, and ROKU
- Shares of Goldman Sachs Group Inc. (NYSE: GS) added 0.6% after the Wall Street bank easily topped Q1 earnings and revenue estimates. The firm reported earnings per share (EPS) of $6.95 on top of more than $10 billion in revenue. Analysts projected EPS of $5.67 on top of $8.89 billion. The investment bank hiked its quarterly dividend and said that revenue from equity trading rallied thanks to an uptick in recent market volatility.
- Shares of Tesla Inc. (Nasdaq: TSLA) are flat on the news that the firm will suspend production of its Model 3 vehicles. The firm said the temporary halt in production will aim to "improve automation" and address ongoing bottlenecks in its production process.
- Shares of Roku Inc. (Nasdaq: ROKU) popped more than 8.2% on news that Steven Cohen's family office has taken a passive 5.1% stake in the company. The streaming device manufacturer also announced that it has added ESPN's subscription service, ESPN+, to its lineup of services on its digital devices.
- Shares of Netflix Inc. (Nasdaq: NFLX) added more than 7.4% in pre-market hours after the firm reported earnings after the bell Monday. Although the firm's report was in line with analysts' expectations, shares are popping thanks to increased optimism over the firm's forward guidance for the current quarter. Markets are also bullish after the firm reported that the company added more than 7.4 million international subscribers.
- Look for additional earnings reports from International Business Machines Corp. (NYSE: IBM), Johnson & Johnson (NYSE: JNJ), Intuitive Surgical Inc. (Nasdaq: ISRG), Lam Research Corp. (Nasdaq: LRCX), CSX Corp. (NYSE: CSX), UnitedHealth Group Inc. (NYSE: UNH), United Air Lines Inc. (NYSE: UAL).
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.