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The Dow Jones Industrial Average fell slightly in pre-market hours as markets anticipated results from the 2018 midterm election. Candidates are making their final pitches this morning as investors prepare for a number of scenarios that could impact the U.S. economy and markets over the next two years.
In the short term, investors have cause to be bullish regardless of polling results. According to a report from The New York Times, the S&P 500 has received a median bump of 18.4% during every midterm election cycle since 1946.
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
- This morning, Americans head to the polls for the 2018 midterm election. We will know tonight whether the Republicans can hold the House and the Senate, or whether democratic minority leader Nancy Pelosi will pry away the Speaker's gavel from Speaker Paul Ryan. Should the Democrats win back the House, it is unclear how they intend to direct their newfound legislative power with the Senate and executive branch still in Republican hands. Republicans are widely expected to retain control of the Senate, dividing the nation's legislative branch between the two parties.
- While the media will center its focus on the House of Representatives, we'll be focusing on how to make money in this election. And there's no greater profit machine that will see its gears accelerate than the legal cannabis industry. Money Morning Defense and Tech Specialist Michael Robinson explains why today might be the most important day for the cannabis industry in decades. Here's how to profit.
- CVS Health Corp. (NYSE: CVS) leads a busy day of earnings reports on Tuesday. Shares added nearly 3% after the benefits manager reported earnings per share of $1.73, a figure that topped estimates by $0.02. The firm also beat revenue estimates thanks to a 6.7% surge in same-store sales. While investors are eyeing the numbers, the bigger news is how the company plans to streamline its $69 billion merger with health insurer Aetna. Last month, the U.S. Justice Department conditionally approved the merger.
Money Morning Insight of the Day
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Stocks to Watch Today: AMZN, GE, BABA
- Amazon.com Inc. (NASDAQ: AMZN) surprised investors on Monday night with the announcement that the company plans to split its second headquarters between two cities. According to multiple reports, the company's likely two winners are Crystal City, Virginia, a suburb outside of Washington D.C. and Long Island City, a neighborhood across the East Hudson River from New York City. The company is expected to make an announcement after one year of touring the country and taking proposals. The firm is expected to invest at least $5 billion and create 50,000 new jobs as part of this initiative.
- General Electric Co. (NYSE: GE) is still shedding assets, a week after the company slashed its dividend and saw share prices fall under $10 for the first time since the Great Recession. The conglomerate announced it has sold its commercial lighting division to a private equity firm. GE shares were up 0.1% in pre-market hours.
- Alibaba Group Holding Ltd. (NYSE: BABA) CEO Jack Ma doesn't approve of the ongoing trade dispute between the United States and China. At a conference hosted by the Chinese elite, Ma told the audience that the "trade war is the most stupid thing in this world." Ma has been a longtime critic of the ongoing dispute. In September, Ma withdrew a proposal to expand Alibaba's reach into the U.S. market, where he planned to create one million jobs.
- Look for additional earnings reports from Archer Daniels Midland Co. (NYSE: ADM), Becton Dickinson and Co. (NYSE: BDX), Etsy Inc. (NASDAQ: ETSY), Louisiana-Pacific Corp. (NYSE: LPX), Papa John's International Inc. (NASDAQ: PZZA), Ralph Lauren Corp.(NYSE: RL), Toyota Motor Corp. (NYSE: TM), and Wendy's Co. (NYSE: WEN)
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.