The Dow Jones Industrial Average rose just over 25 points in pre-market trading this morning as U.S. trade envoys arrived in Beijing for high-profile talks with the Chinese government. The talks come on the heels of signs that the Chinese economy is straining under pressure from American trade sanctions.
On Friday (Jan. 4), the Chinese central bank announced it would free up roughly $116 billion and cut its reserve ratio by 1% in an effort to spur growth in the Chinese economy. By cutting the reserve ration, that $116 billion in liquidity could double and help the nation reverse its ongoing economic downturn and sluggish GDP growth.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Index
Previous Close
Point Change
Percentage Change
Dow Jones
23,433.16
746.94
3.29%
S&P 500
2,531.94
84.05
3.43%
Nasdaq
6,738.86
275.35
4.26%
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 Monday
The government shutdown continued into its third week, marking the second-longest shutdown in 20 years. The ongoing battle over funding a border wall on the nation's southern boarder remains a central point of contention between Republicans and Democrats. Over the weekend, U.S. President Donald Trump suggested that he would be willing to accept funding that allocated for a wall built of steel rather than concrete. However, democrats gave no indication the concession changed their hard-line opposition to funding the wall.
Today, biotech and healthcare giants travel to San Francisco for the annual JPMorgan Chase & Co. (NYSE: JPM) conference. The event is historically a place where companies announce mergers and acquisitions or other major strategic initiatives. Ahead of the event, pharma buffs were treated to a huge deal last Thursday after Celgene (NASDAQ: CELG) and Bristol-Myers Squibb (NYSE: BMY) announced a $74 billion merger. The stakes for this deal are quite high. If either party walks away, the termination fee will be a whopping $2.2 billion, according to a filing with the U.S. Securities and Exchange Commission.
Stocks to Watch Today: MRK, NFLX, GS, BMY
Shares of pharmaceutical giant Merck & Co. (NYSE: MRK) are generating a lot of buzz as company lawyers head to the U.S. Supreme Court. The nation's top court will hear arguments in the firm's appeal of a lower court ruling that helped reinstate hundreds of lawsuits against the firm over its osteoporosis drug, Fosamax. Plaintiffs accuse Merck of not offering adequate warnings on the risk of thigh bone fractures.
Netflix Inc. (NASDAQ: NFLX) will look to carry momentum from a strong performance on Friday. Shares of the streaming giant popped more than 9% after Goldman Sachs Group Inc. (NYSE: GS) added NFLX stock to its "Conviction Buy" list.
We all know that Bristol-Myers Squibb (NYSE: BMY) just announced a huge deal with Celgene. But the story that you might have missed comes in a Federal court in Maryland. According to Reuters, a federal judge has said that Bristol-Myers, the Rockefeller Foundation, and Johns Hopkins University must stand as defendants in a $1 billion lawsuit against them. Their crime: They allegedly had "roles in a late-1940s government experiment that infected hundreds" of Guatemalan soldiers, mental patients, sex workers, prisoners, and others with gonorrhea and syphilis without the subjects' consent. These experiments resulted in at least 83 deaths, according to the BBC. Roughly 5,500 Guatemalan citizens were subjects in these U.S.-funded experiments.
No major U.S. companies report earnings on Monday. Instead, pay attention to a report from Bank of America Corp. (NYSE: BAC). The bank's analysts reported just how serious the market downturn has been over the last year. According to BOA, the global equity markets have shed nearly $20 trillion since January of last year. Even more alarming, in the last six weeks, investors have pulled a record $84 billion out of stocks.
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.