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The Dow Jones today is opening more than 150 points lower thanks to a troubling economic report out of China.
Yesterday, China reported its economy grew 6.6% in 2018, the lowest growth rate it's seen since 1990. Even worse, its fourth-quarter GDP grew just 6.4%, signaling the slowdown was deepening.
As the government shutdown drags on, the weakening global growth could send stocks back into the red.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now here's a closer look at today's most important market events and stocks, plus Wednesday's economic calendar.
The Top Stock Market Stories for Tuesday
- On Monday, markets were closed in honor of Martin Luther King Jr. Day. Today, we'll be paying close attention to developments out of Davos, Switzerland, where the World Economic Forum will kick off. U.S. President Donald Trump withdrew his delegation last week from the event, citing the need to stay in Washington to work on a deal to reopen the government. Global financial leaders will be discussing ongoing tensions around global trade battles, Brexit, slowing economic growth, and ongoing geopolitical tensions in the Middle East, Eastern Asia, and North America.
- Over the weekend, President Trump made a pitch to Democrats to end the government shutdown, which just entered its fifth week. Trump offered the extension of temporary immigrant protections in exchange for the funding of the border wall. Speaker of the House Nancy Pelosi quickly rejected the pitch, calling it a "non-starter." She suggested that Trump reopen the government before negotiating again on the issue. The economic impacts of the shutdown are set to accelerate. This week, the final food stamp payments went out, while TSA agents continue to call out sick and create long lines at airports.
- China reported that economic growth hit its weakest levels in 28 years. The country said that 2018 gross domestic product (GDP) hit just 6.6%. If you've been reading our daily commentary, you know that Apple Inc. (NASDAQ: AAPL) CEO Tim Cook recently offered a warning on the state of the Chinese economy and signaled additional pain in the future. Ongoing trade tensions, slumping consumer demand, and exploding debts continue to weigh on the nation's economy. With weakness clear, Chinese policymakers are set to introduce new stimulus measures to bolster the world's second largest economy. China's GDP hit just 6.4% in the fourth quarter of 2018, and total growth is projected to slump to just 6% in the year ahead. Of course, these are Chinese officials' figures, which could be inflated.
Money Morning Insight of the Day
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Stocks to Watch Today: IBM, JNJ, SNAP
- International Business Machines Corp. (NYSE: IBM) leads a busy day of earnings reports on Tuesday. Today, investors will be looking for insight into the progress of integrating Red Hat after Big Blue bought the software firm in 2018. In addition, investors will await updates on the firm's 2019 outlook and its struggling margins. Financial analysts expect the firm will report earnings per share of $4.84 on top of $21.75 billion in revenue.
- Shares of Johnson & Johnson (NYSE: JNJ) are in focus after the company reported earnings before the bell. The healthcare giant saw shares sink by 1.7% despite news that it beat consensus expectations before the bell. The downtick is the result of the firm issuing a weaker-than-expected revenue outlook for the current quarter.
- It's been a very difficult run for Snap Inc. (NYSE: SNAP), the owner of social media giant SnapChat. The firm recently saw its CFO depart after less than a year at the company. Shares have plunged to all-time lows due to weak earnings and stagnant user growth. And now the firm announced it has forced out two executive members due to an inappropriate relationship with a company contractor. The firm's director of global security, Francis Racioppi, was released last year after he hired a contractor, had a relationship with the woman, and then pulled the contract after the relationship ended. The firm also let go of its head of human resources in relation to the matter.
- Look for earnings reports from Capital One Financial Corp. (NYSE: COF), Fifth Third Bancorp (NASDAQ: FITB), Halliburton Co. (NYSE: HAL), PetMed Express Inc. (NASDAQ: PETS), Prologis Inc. (NYSE: PLD), Steel Dynamics Inc. (NASDAQ: STLD), TD Ameritrade Holding Corp. (NASDAQ: AMTD), Travelers Co. Inc. (NYSE: TRV), and UBS Group AG (NYSE: UBS).
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.