The Dow Jones Industrial Average kicked off 2019 with a projected 370-point loss in pre-market hours. Investors are looking to put a brutal December behind them and search for positive indicators that help bolster the Dow, Nasdaq, and S&P 500. However, negative economic news out of China set the tone on Wednesday morning.
The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) fell from 50.2 in November to 49.7 in December. Any figure under 50 signals that China's manufacturing sector is contracting. This was the first contraction in 19 months, as concerns about the ongoing trade dispute between China and the United States continue to weigh on economic sentiment across the country.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
Index
Previous Close
Point Change
Percentage Change
Dow Jones
23,327.46
265.06
1.15%
S&P 500
2,506.85
21.11
0.85%
Nasdaq
6,635.28
50.76
0.77%
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: Catastrophe Ahead to Affect 176 Million U.S. Investors
The greatest economic catastrophe is about to blindside us all.
Decades ago, corrupt money managers and politicians buried a $6 trillion ticking time bomb in the heart of the U.S. economy - and when it blows, scarcely a soul will not be affected.
You need to start preparing now, because when this bomb hits, you'll be scurrying to pick up the pieces.
The partial government shutdown stretched into its 12th day this morning as Congress continued to squabble over the border wall and funding the government. Democrats announced plans to end the government shutdown without offering $5 billion the wall along the U.S.-Mexico border. However, the Senate has stated it will not send U.S. President Donald Trump any bill that doesn't include wall funding. Investors are beginning to worry that the U.S. government may face another credit downgrade from Standard and Poor's if the shutdown continues. Another downgrade could drive the cost of borrowing higher for the U.S. government and make the current servicing to American debt even costlier.
Oil prices are looking to rebound from their 2018 downturn, the first annual decline since 2015. The WTI oil price plunged by 40% during the fourth quarter thanks to ongoing concerns about oversupply and the reintroduction of sanctions by the United States on Iran's economy. JPMorgan Chase & Co. (NYSE: JPM) said this week that unless OPEC accelerates production cuts, the price of oil will stay lower in the months ahead.
Stocks to Watch Today: NFLX, RCI, IBM
Netflix Inc. (NASDAQ: NFLX) is facing criticism after it yanked an episode of "Patriot Act with Hasan Minhaj" in Saudi Arabia. The streaming giant pulled the episode - which was critical of the Saudi government and the Crown Prince over the death of journalist Jamal Khashoggi. Netflix said that it received a legal request to pull the episode to comply with the nation's laws. Minhaj, a former correspondent on "The Daily Show" suggested that the United States should reassess its relationship with Saudi Arabia during the episode, prompting a complaint from country's Communications and Information Technology Commission. The news came as Netflix announced that its company executives Reed Hastings and Ted Sarandos will receive $31.5 million in compensation this year.
In earnings news, RCI Hospitality Holdings Inc. (NASDAQ: RICK) announced that it topped earnings on Monday afternoon. The firm reported fourth quarter earnings of $0.41, a $0.05 jump from the same period in 2018. In addition, the firm reported that its sales jumped from $39.21 million to $40.676 million year over year. Shares of RCI added 8.1% on Monday.
International Business Machines Corp. (NYSE: IBM) made another big splash with its $34 billion purchase of Red Hat last year. The "Cloud Wars" continue to heat up, and investors are looking for the next company to buy and make triple digits in the process. Today, we're unveiling our top "cloud computing" M&A pick in 2019. Go here now.
Today, look for an earnings report from Motorcar Parts of America Inc. (NASDAQ: MPAA).
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.