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This morning, the Dow rose over 175 points on its final trading day of 2018. Investors turned bullish after U.S. President Donald Trump said there has been "big progress" on a deal with China on trade. Coming into Monday, the Dow Jones has been off 6.7% in 2018. That represents the worst annual downturn since 2008.
Here are the numbers from Friday 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 Monday
- On Saturday, President Trump tweeted that he had a "long and very good" phone call on trade with Chinese President Xi Jinping. The United States and China are looking to reach a comprehensive trade deal during a 90-day period in which countries agreed to not increase tariffs on one another. The Wall Street Journal has suggested that Trump's tweet was "overstated," and said that both nations will resume trade discussions in Beijing in January.
- The president is continuing his standoff with Congress over the funding of a border wall between the United States and Mexico. Trump has said that the government will stay closed until Congress provides him with $5 billion in funding for the project. According to Trump's new chief of staff, Mick Mulvaney, Trump is skipping a bash at his Mar-a-Largo resort in Florida and will stay in Washington to work on securing a deal to reopen the government.
- Markets must be wary about the state of the Chinese economy. This morning, China's National Bureau of Statistics announced that its manufacturing levels fell to their lowest point in two years. The manufacturing purchaser's index hit 49.4, falling short of consensus expectations of 50.0. This is a critical level, as a reading below 50 signals that the nation's manufacturing output has contracted. In addition to ongoing economic and debt challenges in China, the nation remains locked in a brutal trade war with the United States.
Stocks to Watch Today: PGE, DIS, VZ, SHLDQ
- Shares of Pacific Gas & Electric Corp. (NYSE: PGE) are under pressure after a California official suggested that the company could face murder charges over the recent wildfires that swept through the state. The state attorney general said that murder or manslaughter charges were possible should a judge or jury decide that the company acted "recklessly" in causing the recent Camp Fire that killed at least 86 people. The AG's statement was not a signal that the state was pursing such charges, but just offered a list of what charges could be possible depending on the cause of the wildfire.
- Walt Disney Co. (NYSE: DIS) and Verizon Communications Inc. (NYSE: VZ) announced they had struck a deal to keep ESPN on Fios. The announcement came a day before a deadline would have expired. The deal will ensure that Verizon Fios subscribers have access to the slate of college football games slated on ESPN today and tomorrow. The two companies will release a copy of their contract in the coming days.
- Sears Holdings Corp. (OTC: SHLDQ) announced plans to shutter another 80 stores by late March 2019. The announcement came shortly before company Chair Eddie Lampert's hedge fund made an offer to save the company from liquidating. Sears filed for bankruptcy in October and continues to shutter stores. The firm also received a $4.4 billion offer from Transform Holdco Company on Friday; however, it's unclear whether the company's board is prepared to accept the deal. Should no deal be reached, the firm could be forced to liquidate some or all of its assets.
- No U.S. companies report earnings on New Year's Eve 2018.
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.