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The Dow Jones Industrial Average dropped 107 points as economic instability continued to rack emerging markets across the globe. On Monday, South Africa announced that the nation's gross domestic product (GDP) had contracted by 0.7%, indicating that the African nation may be on the verge of a recession.
South Africa's economic woes are the latest financial crisis to threaten emerging market currencies – the Mexican peso, Indonesian rupiah, Turkish lira, and Argentine peso all fell on concerns about global government debt. The contagion appears to be spreading in the wake of sharp currency declines in Argentina and Turkey. However, this is not a sign that investors should throw in the towel quite yet…
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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The Top Stock Market Stories for Wednesday
- Today will be another important day on Capitol Hill. Today, Facebook Inc. (Nasdaq: FB) COO Sheryl Sandberg and Jack Dorsey, the CEO of Twitter Inc. (NYSE: TWTR), will testify before the Senate Intelligence Committee. The tech executives will discuss their firms' efforts to deter foreign influence in the upcoming 2018 midterm elections.
- The United States and Canada are no closer to fixing NAFTA than they were last Friday. Today, Canadian Prime Minister Justin Trudeau said that his nation will not bow to the United States during trade talks – the nations will continue to discuss trade this morning. However, U.S. President Donald Trump has said that the United States won't make any concessions to get a deal done.
Money Morning Insight of the Day
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Three Stocks to Watch Today: GE, AMZN, JD
- General Electric Co. (NYSE: GE) shares are under pressure after the stock received a downgrade from Swiss bank UBS Group AG (NYSE: UBS). The investment bank cut its price target for GE from $16 to $13. The bank cited ongoing struggles at GE's power division as it continues to lose market share.
- Amazon.com Inc. (Nasdaq: AMZN) stock is on pace to overtake Apple Inc. (Nasdaq: AAPL) after it became the second company to achieve a $1 trillion market capitalization. The stock price has now doubled in a year thanks to its strong growth in retail sales and cloud computing. Apple needed 38 years to achieve the $1 trillion market cap while Amazon needed just 21 years. With that said, both AMZN and AAPL now comprise 8% of the entire S&P 500 market cap.
- Shares in JD.com Inc. (Nasdaq: JD) fell more than 5% in pre-market hours. Shares are on the decline after police said that its billionaire founder was arrested last week on charges of sexual assault.
- Look for additional earnings reports from Ctrip.com International Ltd. (Nasdaq: CTRP), Guidewire Software Inc. (Nasdaq: GWRE), Ollie's Bargain Outlet Holdings Inc. (Nasdaq: OLLI), Vera Bradley Inc. (NYSE: VRA), and Verint Systems Inc. (Nasdaq: VRNT)
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.