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The Dow Jones today is rebounding after a dismal Monday trading session, but threats still lurk in the background.
Trade tensions with China are set to renew as the White House appoints Peter Navarro, a fierce protectionist, to the negotiating team.
Plus, the U.S. Justice Department has announced criminal charges against Meng Wanzhou, the CFO of Chinese telecom giant Huawei, just before trade talks are set to start. The DOJ is seeking extradition of the executive and has accused the firm of stealing trade secrets from T-Mobile U.S. Inc. (NYSE: TMUS).
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Here are the numbers from Monday 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 Tuesday
- On Tuesday, the U.S. Federal Reserve will kick off its two-day meeting on monetary policy. While investors will speculate on how many times the central bank will raise interest rates in 2019, the real story is what the Fed plans to do with its massive balance sheet. There is speculation that Fed Chair Jerome Powell will be far more patient in unwinding the central bank's massive portfolio. Powell said in December that the Fed will be more flexible this year on interest rates. Economists do not expect a rate hike this month.
- The Trump administration is accelerating its plans to squeeze support away from Venezuelan dictator Nicolas Maduro. Yesterday, the White House announced sanctions on the nation's state-owned oil company PDVSA. The White House moved to block $7 billion in Venezuelan assets and will sanction roughly $11 billion in oil revenue. The United States recently recognized opposition leader Juan Guaido as the country's interim president and is now targeting Maduro's money by moving revenue into an account that he cannot access. While Maduro is seeking direct conversations with Trump, the U.S. president has also floated the idea of sending up to 5,000 troops into Venezuela.
- Apple Inc. (NASDAQ: AAPL) will lead today's slate of earnings reports. The tech giant will report earnings after the bell today. The iPhone producer has seen shares erode since it slashed its fourth-quarter guidance. The firm warned that they expected weaker financial growth due to weak iPhone sales in China. Wall Street has slashed outlooks and price targets ahead of today's earnings report. While iPhone sales will generate the most headlines, look for a lot of focus on Apple's services business. Consensus expectations, according to Bloomberg, call for earnings per share (EPS) of $4.17 on top of $83.97 billion in revenue.
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Stocks to Watch Today: PCG, LMT, NVDA, WHR
- Pacific Gas & Electric Corp. (NYSE: PCG) filed for bankruptcy. Shares fell 5.9% in pre-market hours and could continue to decline today. The filing came in the wake of massive liabilities for its role in last year's massive California wild fires. The Chapter 11 filing also came despite a major investor's proposal to keep the utility giant out of court.
- Shares of Lockheed Martin Corp. (NYSE: LMT) are in focus as defense stocks begin to report earnings this week. LMT is expected to report EPS of $4.39 on top of $13.822 billion in revenue. Over the last two years, LMT has topped earnings estimates and revenue estimates 75% of the time.
- Shares of Nvidia Corp. (NASDAQ: NVDA) plunged as much as 17% after the company slashed its revenue guidance for the fourth quarter. The chipmaker blamed "deteriorating macroeconomic conditions, particularly in China" for its update. China recently announced that its 2018 economic growth rate was its slowest in 28 years. The country has experienced a sharp drop in domestic consumer demand and faced increasing pressures due to U.S. tariffs. Goldman Sachs Group Inc. (NYSE: GS) listed Nvidia alongside several companies to avoid due to its heavy exposure to China's economy.
- Shares of Whirlpool Corp. (NYSE: WHR) plunged more than 7% in pre-market hours after the company reported earnings after the bell Monday. Although the firm topped earnings expectations, the iconic appliance manufacturer missed revenue forecasts and issued weak full-year guidance.
- Look for earnings reports from Pfizer Inc. (NYSE: PFE), Advanced Micro Devices Inc. (NYSE: AMD), eBay Inc. (Nasdaq: EBAY), Verizon Communications Inc. (NYSE: VZ), L-3 Technologies Inc. (NYSE: LLL), Align Technology Inc. (NASDAQ: ALGN), Harley-Davidson Inc. (NYSE: HOG), Biogen Inc. (NASDAQ: BIIB), Illumina Inc. (NASDAQ: ILMN), and 3M Co. (NYSE: MMM).
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.