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The Dow Jones today rose over 120 points in pre-market trading after the Chinese government offered to buy roughly $70 billion of U.S. goods in exchange for a suspension of American tariffs on Chinese exports. Liu He, Chinese President XI Jinping's economic envoy, made clear that the offer would be revoked if the United States proceeded with imposing $50 billion on Chinese made products next month.
This morning, the World Bank warned that a spike in global tariffs could fuel a significant drop in the markets and reignite an economic crisis similar to the one experienced in 2008. As concern for the impact of tariffs grows, we've identified the perfect profit play on the American market. Check it out 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 Money Morning insight, the most important market events and stocks to watch.
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Money Morning Insight of the Day
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The Top Stock Market Stories for Wednesday
- Markets are cheering a major development in efforts to fix the ongoing trade conflict between the United States and China. According to Reuters, Chinese telecom giant ZTE has signed an agreement to get back into business with its American partners. The agreement will lift a ban by the U.S. Commerce Department that prevented China's No. 2 telecommunications equipment from buying from U.S. suppliers. This is a major development, and one that signals progress among trade officials from both nations.
- There are now more job openings in the United States than available workers. This is the first time that the Department of Labor has documented this phenomenon. There are 6.7 million openings compared to the 6.4 million workers available to fill those positions. As a result, U.S. companies have been forced to increase compensation in order to attract talent.
- All of the positive economic development could come to a screeching halt should the U.S. experience the largest labor strike in a decade. Reports indicate that the Teamsters and the United Parcel Service (NYSE: UPS) are on a collision course that could result in a general strike. The union has announced that 260,000 UPS employees have authorized a strike should both sides fail to reach a labor deal by Aug. 1. UPS is responsible for the transport of 6% of the nation's gross domestic product.
Three Stocks to Watch Today: TSLA, NOG, WFC
- Tesla Inc. (Nasdaq: TSLA) investors remain committed to giving Chair Elon Musk more of their money. On Tuesday, shareholders struck down proposals that would have removed Musk from the chair role and shaken up the board of directors. Both proposals failed. At the same shareholder event, Musk announced plans for Tesla to open a production facility in Shanghai and projected that his firm will likely produce 5,000 Model 3 vehicles per week by the end of June.
- In deal news, defense contractor Northrop Grumman Corp. (NYSE: NOC) has won U.S. antitrust approval to purchase rocket motor supplier Orbital ATK Inc. (NYSE: OA). The Federal Trade Commission okayed the $7.8 billion deal on the condition that Northrop will supply its competitors with rocket motors.
- Wells Fargo & Co. (NYSE: WFC) has announced plans to divest all of its branches in three states. The firm will sell its 48 branches in Michigan, Indiana and Ohio to Flagstar Bancorp Inc. (NYSE: FBC), a savings and loan bank. The deal will see about $2.3 billion in deposits exit Wells Fargo's coffers. Roughly 490 employees are expected to receive job offers from Flagstar.
- Look for additional earnings reports from Thor Industries Inc. (NYSE: THO), Five Below Inc. (Nasdaq: FIVE), United Natural Foods Inc. (Nasdaq: UNFI), Signet Jewelers Ltd. (NYSE: SIG), Vera Bradley Inc. (NYSE: VRA), and Comtech Communications Corp. (Nasdaq: CMTL).
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.