Dow Jones Industrial Average Rises 147 Points as Chinese Trade Talks are Extended into Third Day  

The Dow Jones Industrial Average rose 147 points in pre-market trading this morning following news that negotiations between Washington and Beijing have been extended for a third day.

Following two days of trade talks in the Chinese capital, U.S. President Donald Trump reported that negotiations are going "very well." Reports indicate that progress is being made in convincing China to buy more U.S.-made goods.

Today, the Dow will try to extend this week's winning streak to four days, a figure we haven't seen since November 2018. Keep an eye out for markets' continued reaction to the prolonged government shutdown and the release of December's Federal Reserve meeting minutes.

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Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

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

• The government shutdown continued in its third week. On Tuesday night, President Trump gave a televised speech on the state of the shutdown and called for Congress to authorize spending for a border across the U.S.-Mexico border. Democratic leaders Speaker Nancy Pelosi (D-CA) and Senator Chuck Schumer (D-NY) called on Trump and Congress to pass a spending bill to reopen the government and then continue the debate on immigration policy.
• The government shutdown could do damage to America's pristine AAA credit rating. Fitch Ratings has warned of a potential cut to the U.S. credit rating should the government shutdown continue in the future. With the U.S. facing record deficits and total debt above $22 trillion, the agency said that a rating downgrade could happen if the government shutdown triggers a breach of the nation's debt ceiling. The U.S. government's credit rating was cut for the first time ever during a similar budget battle on Capitol Hill in 2011.
• Today, markets will pay close attention to minutes from the December Federal Reserve meeting. The minutes will reveal the mindset and stances of America's central bankers after they increased the benchmark interest rate by 25 basis points from 2.25% to 2.5%. Investors are looking for clues on the timing of the Fed's next rate hike. Fed Chair Jerome Powell said after the release of the rock-solid December jobs report that the central bank will be more flexible in the months ahead with interest rates.

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Stocks to Watch Today: BBBY, BA, CAT, STZ, AAPL

• Shares of Boeing Co. (NYSE: BA) and Caterpillar Inc. (NYSE: CAT) both pushed higher after the first round of trade talks between U.S. and Chinese trade officials were extended to a third day (they will conclude today). Both companies conduct a significant amount of business in China, the world's second largest economy. Investors are wondering if it will be possible for both nations to reach a deal before the March 1 deadline. Otherwise, we will see another round of tariffs that increase import duties to 25%.
• Bed Bath & Beyond Inc. (NASDAQ: BBBY) leads the busiest day of earnings reports this week. The retailer has been under pressure over the last year, with its stock plunging roughly 49%. Wall Street analysts expect the firm to report earnings per share of $0.18 on top of $3.03 billion in revenue.
• Constellation Brands Inc. (NYSE: STZ) will also report earnings today. While the company has generated a lot more buzz due to its big investment in cannabis producer Canopy Growth Corp. (NYSE: CGC), shares were off about 30% in 2018. Constellation is best known as the brewer behind Corona, Pacifico, and Modelo Especial.
• Apple Inc. (NASDAQ: AAPL) CEO Tim Cook is "optimistic" about a deal between the United States and China. On Tuesday, Cook told CNBC that the weakness in iPhone sales that the company has faced in recent months is temporary. "The product pipeline has never been better," Cook said. "The ecosystem has never been stronger."
• Today, look for earnings reports from Greenbrier Companies Inc. (NYSE: GBX), Lennar Corp. (NYSE: LEN), KB Home (NYSE: KBH), Acuity Brands Inc. (NYSE: AYI), Motorcar Parts of America Inc. (NASDAQ: MPAA), MSC Industrial Direct Co. Inc. (NYSE: MSM), PriceSmart Inc. (NASDAQ: PSMT), and WD-40 Co. (NASDAQ: WDFC).

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

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.

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