The Dow Jones Industrial Average was off 93 points in pre-market hours as investors weighed a busy slate of earnings reports and raised new questions about trade discussions between China and the United States.
Markets have largely ignored the U.S. government shutdown and new concerns about the state of Britain's departure from the European Union. Expect investor focus to remain on earnings season.
Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
The Top Stories for the Dow Jones Industrial Average Today
On Thursday, we moved deeper into earnings season. Despite strong banking results on Wednesday, today got off to a rocky start after Morgan Stanley (NYSE: MS) fell short of Wall Street earnings expectations. The investment bank reported earnings per share (EPS) of $0.80, well short of the $0.89 expected by Wall Street analysts. The firm also missed revenue expectations. Morgan Stanley leaders threw the blame at the world. CEO James Gorman said that ongoing global volatility affected the firm's bottom line.
The trade battle between the United States and China hit another snag in pre-market hours. According to reports, U.S. officials are targeting telecom giant Huawei on allegations that the firm stole trade secrets from their American business partners. U.S. telecom giant T-Mobile US Inc. (NYSE: TMUS) had earlier accused the Chinese telecom firm of stealing information on cell phone testing technology. U.S. officials have previously warned about the possibility that Huawei devices could spy on American consumers.
Yesterday, Prime Minister Theresa May's government narrowly passed a vote of confidence in the British Parliament a day after her proposed Brexit deal suffered the worst loss in the recorded history of the country. This raises the stakes for the United Kingdom to strike another deal or seek another referendum vote on the country leaving the European Union. Regardless, the more important story now is the fact that Europe's financial sector is again showing sharp cracks. Today, French banking giant Societe Generale SA (OTCMKTS: SCGLY) announced that the ongoing "challenging environment in the capital markets" is expected to weigh on its fourth-quarter results. We've also seen a variety of media outlets raise new questions about the future of Deutsche Bank AG (NYSE: DB) and whether the firm many need to merge with another large Gernman financial instution, Commerzbank AG (OTCMKTS: CRZBY).
Money Morning Insight of the Day
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Shares of Netflix Inc. (NASDAQ: NFLX) are in focus as the streaming giant prepares to report earnings after the bell Thursday. The stock was off 1% on Wednesday shortly after it announced it will increase its basic subscription price by $1 and its premium offering by $2. The firm says that the price hikes are necessary to maintain market share and to afford new original television and film content. Today, Wall Street expects that the firm will report EPS of $0.24 on top of $4.21 billion in revenue.
Shares of Electronic Arts Inc. (NYSE: EA) fell 2.6% after investment bank Jeffries Financial Group Inc. (NYSE: JEF) downgraded the video game maker from "Buy" to "Neutral." Analysts said they are concerned about upcoming slate of video games that will be released later this year.
Shares of Gannett Co. Inc. (NYSE: GCI) popped late Wednesday on news that Tribune Publishing Co. (NASDAQ: TPCO) is trying to resurrect its merger talks between the two companies. The Wall Street Journal reports that Tribune is reconsidering a bid for the publisher of USA Today in the wake of another offer from MNG Enterprises.
Look for other earnings reports from American Express Co. (NYSE: AXP), PPG Industries Inc. (NYSE: PPG), Fastenal Co. (NASDAQ: FAST), Charles Schwab Corp. (NASDAQ: SCHW), and Home Bancshares Inc. (NASDAQ: HOMB).
Millions of Americans Now Entitled to Collect "Federal Rent Checks"
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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.