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The Dow Jones today is on the rise for the third straight day on Wall Street. Dow futures collected a gain of over 100 points in pre-market trading, as investors continued to bet on a robust earnings season. While geopolitical tensions over Syrian military intervention and the breakdown of American trade policy continue to linger, markets are likely to move based on earnings reports for the short term.
Much of this week's market news is dominated by earnings reports from the nation's largest financial institutions. Money Morning Special Situation Strategist Tim Melvin leaned in on a few of the big banks' earning calls over the last week and discovered some surprising insights – ones that will have a direct hand in shaping the future profitability of our investments. Take a look at Tim's findings here…
Here are the numbers from Tuesday 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 Kinder Morgan Inc. (NYSE: KMI) and Abbott Laboratories (NYSE: ABT). 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 Wednesday
- Morgan Stanley (NYSE: MS) leads a busy day of earnings reports. The company reported earnings per share (EPS) of $1.37 on top of $11.08 billion in revenue. Analysts projected EPS of $1.28 on top of $10.45 billion in revenue. Shares of MS stock popped 2.4% thanks to stronger profits (a 26% jump) from the company's trading division. Recent market volatility has benefited the trading operations of Wall Street investment banks. Here's how you can tap into volatility for big profits this week.
- Once again, markets are keeping a close eye on ongoing issues between the United States and its largest trading partners. According to reports, trade problems are expected to offset any gains projected from recent tax reform. The news comes as China is looking to get other U.S. trade partners to stand on their side and oppose American protectionism.
- Meanwhile, NAFTA officials are set to meet in Washington in order to accelerate the renegotiation of the three-nation trade agreement. This news comes the same morning that U.S. President Donald Trump took to Twitter to bash the Trans-Pacific Partnership. "While Japan and South Korea would like us to go back into TPP, I don't like the deal for the United States," he tweeted. Trump recently raised the possibility that the United States could join the 11-nation deal. Farming groups have been pushing Trump to rejoin the treaty due to the competitive disadvantage they will face against farmers in Canada, Mexico, and Australia, three member states of the deal.
Three Stocks to Watch Today: MS, AXP, AXP
- International Business Machines Corp.(NYSE: IBM) shares plunged more than 5.4% in pre-market hours after the company reported weaker-than-expected forward guidance after the bell on Tuesday. The company reported EPS of $2.45, a figure that beat analysts' expectations by $0.03. Its $19.1 billion in revenue also topped Wall Street expectations. However, the firm fell short on its annual profit outlook.
- People are lining up again to give Elon Musk more money. Shares of Tesla Inc. (Nasdaq: TSLA) were in the black today after auto news site Electrek reported that the company will increase production of the Model 3 to 6,000 vehicles per week by late June. Last week, Tesla suspended its Model 3 production to address bottlenecks in its assembly line.
- Shares of American Express Co. (NYSE: AXP) are in focus as the company reports earnings after the bell. Wall Street projects EPS of $1.73 on top of $9.21 billion in revenue. American Express stock is trying to rebound from about a 7% decline to start the year. That came after a very impressive 2017 performance.
- Look for additional earnings reports from Kinder Morgan Inc. (NYSE: KMI), Abbott Laboratories (NYSE: ABT), U.S. Bancorp (NYSE: USB), Pier 1 Imports Inc. (NYSE: PIR), United Rentals Inc. (NYSE: URI), Steel Dynamics Inc. (Nasdaq: STLD), Canadian Pacific Railway Ltd. (NYSE: CP), and Alcoa Corp. (NYSE: AA).
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.