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The Dow Jones Industrial Average rose 132 points in pre-market trading as concerns faded over trade disputes between the United States and China. Markets are likely to continue to rally today on the strength of the U.S. jobs market. The U.S. Labor Department reported this morning that weekly jobless claims came in at just 201,000 for last week. That was lower than the 210,000 projected by economists ahead of Thursday's report.
Here are the numbers from Wednesday 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.
Money Morning Insight of the Day
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The Top Stock Market Stories for Thursday
- Markets continue to await developments on potential trade negotiations between the United States and China. However, both nations continue to dig their heels in. The United States slapped 10% tariffs on another $200 billion in Chinese goods, while China retaliated with tariffs on roughly $60 billion in U.S. products. Following this latest round of tariffs, Alibaba Group Holding Ltd. (NYSE: BABA) Chair Jack Ma said his company will no longer enact a plan to create 1 million jobs in the United States. Skeptics had argued that Ma's plan was overly optimistic from the beginning. However, Ma's repositioning is likely a direct symptom of the trade conflict.
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- Next year, one of the biggest geopolitical threats to the markets could be a poorly executed departure of the United Kingdom from the European Union (also known as the Brexit). So far, the United Kingdom has failed to make terms with the world's largest economic bloc on its departure. Many investors and business leaders are concerned that a failed deal could lead the UK to crash out of the EU in March 2019, an even that could cause turmoil in the markets. Leaders on both sides are meeting in Salzburg, Austria this week and hope to come closer to a deal by Thursday.
- Finally, U.S. President Donald Trump hammered global oil cartel OPEC over rising oil prices. Trump called the cartel a "monopoly" and said that oil prices must remain low. The president argued that the United States military provides protection to the region, and that "they would not be safe for very long without us..." OPEC - which includes Iran and Saudi Arabia - will meet with non-members like Russia this weekend to discuss production levels, prices, and targets moving forward. That will be the cartel's last meeting before the 2018 midterm elections.
Stocks to Watch Today: DRI, GE, UAA
- Darden Restaurants Inc. (NYSE: DRI) leads a fairly busy day of earnings reports. The restaurant management giant easily topped Wall Street profit numbers by reporting earnings per share of $1.34. The average Wall Street estimate was $1.23. The firm also easily topped revenue expectations. DRI shares were up 4.5% this morning.
- The problems continue to mount for General Electric Co. (NYSE: GE). This morning, JPMorgan Securities slashed its price target for the U.S. conglomerate from $11 to $10 per share. The investment firm cited ongoing challenges to the company's turbine business. General Electric has been under pressure since the financial crisis, and it was the worst performing stock on the Dow in 2017 before it was ultimately replaced on the index.
- Shares of Under Armour Inc. (NYSE: UAA) added 3.4% this morning, but the driver wasn't necessarily positive for the global apparel giant. According to reports, the Baltimore-based sports apparel giant is cutting 3% of its international workforce. That equates to roughly 400 jobs. The company did raise its fiscal 2018 earnings forecast, and issued a revised update of severance costs.
- Look for earnings reports from Micron Technology Inc. (NASDAQ: MU), Thor Industries Inc. (NYSE: THO), United Natural Foods Inc. (NASDAQ: UNFI), Steelcase Inc. (NYSE: SCS), Scholastic Corp. (NASDAQ: SCHL), and Xcerra Corp. (NASDAQ: XCRA).
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.