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This morning, Caterpillar Inc. (NYSE: CAT) and United Technologies Corp. (NYSE: UTX) pushed the Dow Jones today up 160 points after reporting stronger-than-expected earnings. Both reports issued a strong vote of confidence for the global economy, significantly increasing annual production and profit forecasts. Investors are likely to break the Dow's four-day losing streak today in anticipation of additional earnings reports.
One of the most anticipated earnings reports this week is Facebook Inc. (Nasdaq: FB), which is scheduled to report tomorrow (April 25) after market close. While many investors are steering clear of the stock following the company's recent scandals, the Money Morning team has identified a unique profit play for the stock – one that could net a triple-digit gain. Check out our trade strategy 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 Money Morning insight, the most important market events, and stocks to watch.
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Money Morning Insight of the Day
The threat of a trade war between the United States and China continues to generate headlines around the globe. But there's an important thing that many investors are missing… and that's how to profit from a trade war. This morning, Money Morning Economist Garrett Baldwin explains the danger of "political noise" to your portfolio and gives you a red-hot stock to buy that will profit regardless of the tariff threat sweeping the markets today. Read more right here.
The Top Stock Market Stories for Tuesday
- Shares of Caterpillar Inc. jumped more than 3.6% after the firm reported earnings before the bell. Strong demand for construction and mining equipment helped the firm beat Wall Street expectations for profits and revenue. The firm also hiked its full-year outlook. Caterpillar is just one of many firms to report strong growth in the wake of tax reform and improved economic prospects. So far, 18% of the S&P 500 has reported earnings this quarter. Roughly 78% of these firms have beaten Wall Street profit estimates, according to Thomson Reuters. The average earnings growth is at roughly 20%, the best performance in seven years.
- Markets are keeping a close eye on the 10-year bond, which is hovering near 3% – an important psychological level that is likely to influence future price movements. On Monday, Fox Business Network's "Varney & Co." asked Money Morning Chief Investment Strategist Keith Fitz-Gerald if investors should be worried. Here's what Keith had to say about the 10-year Treasury yield… and how it will affect your stocks and bonds in the future.
- The price of Brent crude oil topped $75.00 and hit its highest level since November 2014. Oil traders were eyeing the ongoing efforts of OPEC and Russia to reduce excessive production around the globe, rising demand ahead of peak driving season, and the possibility that the Trump administration will slap Iran with a new round of sanctions.
Three Stocks to Watch Today: KO, GOOGL, SLM
- Shares of The Coca-Cola Co. (NYSE: KO) added 1.2% after the firm easily beat earnings and revenue expectations. The firm cited strong demand for its new flavors of Diet Coke and its Coke Zero Sugar. Demand was so strong for the quarter that the firm reported organic sales growth of 5%. The company reported earnings per share of $0.47, topping estimates by a penny. Revenue of $7.6 billion easily beat Wall Street estimates.
- Shares of Alphabet Inc. (Nasdaq: GOOGL) seesawed in pre-market hours. The online search giant topped Wall Street earnings and revenue expectations after the bell Monday. However, shares were off 0.5% after executives announced that its business costs were on the rise. The firm's real estate and computer purchases tripled in one year, to $7.3 billion. About one-third of that total came from its $2.4 billion purchase of the Chelsea Market building in New York City.
- Good news for SLM Corp. (NYSE: SLM) investors, but bad news for indebted college students and graduates. The firm – also known as Sallie Mae – topped Wall Street earnings expectations on Monday. The firm said that it increased its loan origination by 7% year over year, to $2 billion. It also increased its loan portfolio to $18.6 billion, a figure that represented a 20% jump from last year.
- Facebook Inc. is still generating headlines, as the company continues to rebound from a major data scandal that fueled a big sell-off after the week of March 19. If you're looking for value in the market, Money Morning Capital Wave Strategist Shah Gilani still believes FB stock is a "must-own tech darling." Read his latest insight on Facebook and why he sees the possibility for triple-digit profits in the months ahead.
- Look for additional earnings reports from Texas Instruments Inc. (NYSE: TXN), Wynn Resorts Ltd. (Nasdaq: WYNN), Verizon Communications Inc. (NYSE: VZ), JetBlue Airways Corp. (Nasdaq: JBLU), Cree Inc. (Nasdaq: CREE), Illumina Inc. (Nasdaq: ILMN), Harley-Davidson Inc. (NYSE: HOG), Lockheed Martin Corp. (NYSE: LMT), Biogen Inc. (Nasdaq: BIIB), United Technologies Corp. (NYSE: UTX), and 3M Co. (NYSE: MMM).
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.