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The Dow Jones Industrial Average fell 70 points in pre-market trading as uncertainty continued to linger around future trade relations between China and the United States. While markets largely rose this week on positive trade developments from Beijing, officials have done little to clarify how or when trade tensions may be resolved.
This week's trade talks in Beijing ended with an agreement to hold higher-level talks in Washington in late January. However, these talks may be postponed due to the ongoing government shutdown, which is on the verge of becoming the longest in U.S. history.
Here are the numbers from Thursday 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.
The Top Stock Market Stories for Friday
- On Thursday, Federal Reserve Chair Jerome Powell told an audience at the Economic Club of Washington that he is very concerned about rising U.S. debt. The nation's national debt is just under $22 trillion, with $16 trillion owed by the American public. Powell's statement also included mounting worries about the ongoing government shutdown.
- If the shutdown continues through Saturday, it will become the longest government closure in U.S. history. Powell stated that the longer the shutdown continues, the more economic and social problems could accelerate. Right now, the FDA has said it might not be able to conduct food testing. Millions of Americans on food stamps may not be able to obtain benefits. And lines at the airport will grow longer with the TSA facing new pressures. Thousands of American workers have already filed for unemployment due to the ongoing shutdown. President Trump has canceled his trip to Davos, Switzerland for the World Economic Forum due to the ongoing shutdown.
- The price of Bitcoin fell more than 10% on Thursday after a sudden sell-off hit the market by surprise. Bitcoin slumped under $4,000 to its lowest level in four weeks thanks to significant turnover in the space. Meanwhile, Ripple has surpassed Ethereum to become the second largest cryptocurrency by market capitalization.
- Oil prices are on track for their 10th consecutive winning day in a row. This would be the longest streak of days in the black since January 2010. Oil prices have pushed higher thanks to news that OPEC and non-members like Russia agreed last month to reduce production output by 1.2 million barrels per month. In addition, Saudi Arabia - OPEC's most important member and largest producer - will slash oil exports. The uptick in crude prices comes despite economic concerns in China and across Europe.
Money Morning Insight of the Day: Public Law 92-313 Creates $11.1 Billion Cash Bonanza
Thanks to an obscure law, over 100 government agencies are required to pay rent, including the DOJ, FBI, and NASA.
This money is being funneled into the Treasury. And it's helped create an enormous $11.1 billion pool of money.
If you add your name to a special distribution list, you could begin collecting $1,795 or more every month from this powerful investment income stream.
Three Stocks to Watch Today:
- Just how bad are conditions in China for American companies? According to reports, retailers are cutting the cost of iPhones in Chinese stores due to customers' attitudes toward the gadgets. Customers simply don't believe that iPhones are worth the cost. Recently, Apple CEO Tim Cook warned about economic conditions in China. This morning, Goldman Sachs Group Inc. (NYSE: GS) forecast that more American companies will grow concerned about conditions on the ground in the world's second largest economy. The investment bank believes that Starbucks Corp. (NASDAQ: SBUX) will be the next company to announce concerns about Chinese economic conditions.
- Ford Motor Co. (NYSE: F) announced plans to restructure its European operations and to lay off thousands of workers. The firm is engaging in a turnaround plan that will see its departure from minivan manufacturing. The company says it will depart markets where it's failed to run a profit.
- Keep a close eye on Netflix Inc. (NASDAQ: NFLX) today. Shares pushed higher after UBS Group AG (NYSE: UBS) upgraded the stock from "Neutral" to "Buy." A UBS analyst also hiked the price target from $400 to $410 per share, basing his decision on stronger streaming subscriber figures. NFLX is up more than 20% and is one of the top-performing S&P 500 stocks of the last 12 months.
- On Friday, look for an earnings report from Infosys Ltd. (NASDAQ: INFY).
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.