Dow Jones Industrial Average Ticks Higher as Fed Prepares Third Interest Rate Hike of 2018

Garrett Baldwin

The Dow Jones Industrial Average jumped 23 points in pre-market hours as the U.S. Federal Reserve indicated that it will raise interest rates for the third time this year. The U.S. Central Bank concludes its two-day meeting on monetary policy this afternoon. Fed Chair Jerome Powell is expected to confirm the Fed's intentions to raise the benchmark interest rate from 2% to 2.25%.

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The Top Stock Market Stories for Wednesday

• The U.S. markets are preparing for the eighth interest rate hike since 2015, and the Federal Reserve may not be done yet. Markets are weighing the possibility that the Fed may raise rates one more time this year (in December). The hikes come as the Fed is attempting to shrink its $4.5 trillion balance sheet. When Powell speaks this afternoon, expect a few questions about the impact of the trade war between the United States and China. Reporters will also likely want to know about geopolitical risks to the U.S. economy and how they might affect growth in a higher-interest-rate environment.
• Yesterday, U.S. President Donald Trump gave a speech before the United Nations General Assembly. During his talk, Trump praised the U.S. economy and defended his administration's actions this year on trade. Trump said that the United States will no longer endure "abuse" from other trade partners. The U.S. Trade Representative Robert Lighthizer also said Tuesday that the U.S. is prepared to proceed on a new trade deal with Mexico without the participation of Canada.
• Oil prices are in focus after President Trump called out OPEC members before the U.N. on Tuesday. During his talk, Trump accused OPEC and non-OPEC participants in collusion efforts on production and prices of ripping off the rest of the world.

Three Stocks to Watch Today: NKE, SVMK, DB

• Shares of Nike Inc. (NYSE: NKE) fell 3.5% after the sports apparel giant reported earnings after the bell. The company topped earnings expectations and reported profit growth of 15%. However, investors took some profits off the table. Shares of Nike stock are up more than 35% on the year.
• SVMK, the parent company of SurveyMonkey, has priced its upcoming IPO at $12 per share. That figure is above analysts' initial range expectation of $9 to $11 per share. The firm expects to reach a market capitalization of $1.46 billion.
• Shares of Deutsche Bank AG (NYSE: DB) are in focus Wednesday. The German business newspaper Handelsblatt said that the company is exploring a potential merger with UBS Group AG (NYSE: UBS). The company is also exploring a possible deal to merge with Commerzbank. Both deals would face a series of regulatory hurdles to gain approval.
• Look for earnings reports from Bed Bath & Beyond Inc. (NASDAQ: BBBY), Pier 1 Imports Inc. (NYSE: PIR), CarMax Inc. (NYSE: KMX), HB Fuller Co. (NYSE: FUL), Progress Software Corp. (NASDAQ: PRGS), Actuant Corp. (NYSE: ATU), Worthington Industries Inc. (NYSE: WOR), and Omnova Solutions Inc. (NYSE: OMN).

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

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.

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