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The Dow Jones Industrial Average jumped 49 points pre-market hours as markets digested the latest round of tariffs on Chinese products. Markets are largely relieved that the White House's latest round of tariffs is limited to a 10% markup on imports rather than the 25% rate floated earlier this month.
China is expected to retaliate with a range of aggressive trade policies. U.S. Commerce Secretary Wilbur Ross said Tuesday morning that the nation is "out of bullets" to fight back. Expect this statement to prompt significant reaction by both nations on Tuesday.
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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The Top Stock Market Stories for Tuesday
- Just how bad could these trade tensions become between the United States and China? Alibaba Group Holding Ltd. (NYSE: BABA) Chair Jack Ma said this morning that these frictions could last for two decades. During an investor conference, Ma predicted that U.S. President Donald Trump's latest round of tariffs will impact Chinese companies immediately and said he expects a lot of production to shift out of the country to avoid these tariffs. Ma said that new trade rules would be necessary in order to avoid a long, extended battle between the two nations.
- Investors are already turning their attention to next week's meeting among officials at the U.S. Federal Reserve. The markets fully expect that the Fed will raise interest rates again this month. That decision would drive up the price of borrowing on anything from mortgages to vehicle loans, from credit card interest rates to variable loans. But what does it mean for gold prices? It will create a fabulous buying opportunity.
Money Morning Insight of the Day
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Stocks to Watch Today: V, MA, AAPL, GOOGL
- Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA) are under the microscope this morning. Both payment processing giants have signed a settlement agreement over a merchant lawsuit filed back in 2005, but originally settled in 2012 over merchant swiping fees. Visa will pay an additional $600 million to the original settlement. Mastercard will pay an additional $108 million.
- Although President Trump plans to hit China with new tariffs, at least one company won't face the full cost: Apple Inc. (NASDAQ: AAPL). According to reports, the Apple Watch is among a list of consumer tech gadgets that will receive exemptions from the latest round of tariffs on imports.
- Alphabet Inc. (NASDAQ: GOOGL) announced it will install its Android operating system into automobiles manufactured by Nissan, Mitsubishi, and Renault. The operating system – set for distribution in 2021 – will include Google Maps, Google Assistant, and Google Play. The three manufacturers combined sold 10.6 million vehicles in 2017.
- Look for earnings reports from AutoZone Inc. (NYSE: AZO), General Mills Inc. (NYSE: GIS), Cracker Barrel Old Country Store Inc. (NASDAQ: CBRL), and Apogee Enterprises Inc. (NASDAQ: APOG).
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.