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The Dow Jones Industrial Average continued to ward off October's losses this morning as strong earnings results from General Motors Co. (NYSE: GM) and Facebook Inc. (NASDAQ: FB) buoyed markets. The Dow projected a 229-point gain on Wednesday, a morning after it surged more than 400 points. Despite the gains, the S&P 500 is still down 7.9% in October, while the Dow is off 6%.
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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.
The Top Stock Market Stories for Wednesday
- October has been the worst month for the Dow since August 2015, while the S&P 500 is locking in its worst loss since May 2010. Ongoing geopolitical sentiment continues to center around a massive trade conflict between the United States and China and expectations for rising interest rates in the months ahead. Earlier this week, U.S. President Donald Trump suggested that a deal between the two nations could be achieved, but he also warned that the United States could slap China with additional tariffs in the future.
- On Friday, the U.S. Labor Department will release its official November jobs report. This morning, we received a sneak preview of what to expect with the release of the ADP employment figures. The company said that private payrolls were up another 227,000 in October, a figure that easily topped economists' expectations of 189,000. Robust job growth, however, may spur speculation that the Federal Reserve is on the verge of raising interest rates for the fourth time in 2018. Strong job growth has been seen in the construction and manufacturing spaces, despite ongoing concerns about a trade war with China.
- A busy day of earnings results is headlined by General Motors Co. (NYSE: GM). The shares of GM popped more than 7% this morning after the Detroit auto giant reported stronger-than-expected profits in the third quarter. The firm reported adjusted earnings per share of $1.87, well above the predicted $1.25. Revenue also came in higher than expectations thanks to strong sales of sports utility vehicles and crossovers.
Money Morning Insight of the Day
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Four Stocks to Watch Today: GM, FB, F, BIDU
- General Motors Co. (NYSE: GM) shares added 1.1% in pre-market hours after the U.S. conglomerate reported earnings before the bell. Shares initially fell after the company slashed its quarterly dividend and raised concerns about its cash flow. However, shares were able to bounce off their nine-year low after UBS Group AG (NYSE: UBS) upgraded the stock to a "Buy" and suggested that its new CEO, Larry Culp, will be successful in his efforts to enact a turnaround strategy.
- Competition is heating up in the autonomous vehicle industry. This morning, Ford Motor Co. (NYSE: F) and Chinese tech giant Baidu Inc. (NASDAQ: BIDU) announced they will begin testing autonomous vehicles together on Chinese streets by the end of December.
- Shares of Facebook Inc. (NASDAQ: FB) popped more than 5% after the firm reported quarterly earnings after the bell Tuesday. Investors appear to be unconcerned about the firm's lackluster revenue and user growth. Although third-quarter revenue increased by 33% year over year to hit $13.73 billion, this figure still fell short of analysts' expectations. However, the earnings report did have a few noteworthy highlights. The firm now estimates that it has roughly 2.6 billion users engaging with Facebook, WhatsApp, Instagram, or Messenger each month. Average daily users of one of these four platforms now sits at 2 billion people.
- Look for earnings reports from Anthem Inc. (NASDAQ: ANTM), Clorox Co. (NYSE: CLX), Estee Lauder Co. Inc. (NYSE: EL), Garmin Ltd. (NASDAQ: GRMN), GNC Holdings Inc. (NYSE: GNC), Kellogg Co. (NYSE: K), Sprint Corp. (NYSE: S), Yum! Brands Inc. (NYSE: YUM) Express Scripts Holding Co. (NASDAQ: ESRX), and Sturm Ruger & Co. Inc. (NYSE: RGR).
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.