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The Dow Jones Industrial Average projected a 15-point decline this morning after the U.S. Commerce Department announced its second estimate of second-quarter growth. The U.S. economy logged its best performance in roughly four years with a reading of 4.2% growth.
The growth was fueled by stronger spending by U.S. businesses on software and by a downtick in U.S. imports. Analysts expected that the U.S. agency would report Q2 gross domestic product of 4.0%. It's important to note, however, that this growth is unlikely to be extended due to a boost provided to consumer spending from the $1.5 trillion tax deal.
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
While we're experiencing the longest bull market in history, Money Morning Quantitative Specialist Chris Johnson sees a few cracks appearing in the stock market.
You see, seasonality and sector rotation are in play right now. That means Q3 is not often very kind to the bulls. That's why you need to pay close attention to one of the most important indicators in the market right now. Chris explains what it is (and what to buy) right here.
The Top Stock Market Stories for Wednesday
- On Wednesday, Canada rejoined trade talks to discuss what appears to be a "take it or leave it" offer from the Trump administration on NAFTA. Canada's trade officials praised Mexico's recent concessions on labor rights and automobiles. According to terms of the existing deal, the United States will cap the number of duty-free vehicles out of Mexico at 2.4 million units. After that, the Trump administration is ready to assign a 25% tariff on all additional vehicles. Canada, meanwhile, must decide on whether to accept the deal as U.S. President Donald Trump has threatened to proceed without the cooperation of the country's northern neighbor and maintain a bilateral deal with Mexico.
- The company behind 007's car of choice is planning to go public. Aston Martin continued the revival of its brand by announcing plans for a $6 billion IPO on the London Stock Exchange. According to reports, the firm will float at least 25% of its shares on the London market. There do not appear to be any plans yet to sell ADRs in New York. The company said that it sold 5,000 vehicles in 2017, its best sales figure in nine years.
Three Stocks to Watch Today: CRM, GOOGL, DKS
- Salesforce.com Inc. (NYSE: CRM) will report earnings after the bell. The cloud computing giant is expected to report earnings per share of $0.47 on top of $3.23 billion in revenue. With strong cloud-computing demand from businesses, expect a lot of anticipation around the company's third-quarter forecast and full-year outlook. Investors will also be looking for an update on the impact of its acquisition of MuleSoft, the largest deal in Salesforce history.
- The White House is pressuring Alphabet Inc. (Nasdaq: GOOGL) after President Trump accused the team behind the Google search engine of selective bias. Trump believes that Google has been hiding positive news about him, but he failed to provide any evidence to his claims. Trump's top economic advisor, Larry Kudlow, said the White House is "having a look" at Google, but didn't provide any details on the plan.
- Shares of Amazon.com Inc. (Nasdaq: AMZN) are on the move thanks to a big upgrade from Morgan Stanley (NYSE: MS). Analysts at the investment bank hiked their price target for AMZN stock to $2,500 per share. That figure would push the e-commerce giant's market capitalization to a whopping $1.2 trillion. This is the highest price target among the 41 analysts covering the stock, according to data from FactSet.
- Look for additional earnings reports from Dick's Sporting Goods Inc. (NYSE: DKS), American Eagle Outfitters Inc. (NYSE: AEO), PVH Corp. (NYSE: PVH), Guess? Inc. (NYSE: GES), Express Inc. (Nasdaq: EXPR), and Tilly's Inc. (Nasdaq: TLYS).
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.