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The Dow Jones today will slump ahead of the conclusion of the March FOMC meeting.
The U.S. Federal Reserve isn't set to raise rates this month – in fact, there have been talks of cutting them – but investors are more concerned with the central bank's balance sheet. The Fed has roughly $4 trillion worth of assets to unload, and the speed and timing of its sell-off could rattle markets.
Read further for more on how this, Brexit tension, and other factors will move the Dow Jones Industrial Average.
Here are the numbers from Tuesday 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 Wednesday
- Shares of FedEx Corp. (NYSE: FDX) plunged 5.6% this morning and led the Dow lower. Tuesday afternoon, the global shipping giant fell short of earnings expectations. The firm warned that declining revenue from foreign markets is weighing on its bottom line and raised concerns about exchange rates and global growth in its forward guidance. CFO Alan Graf said in the company's quarterly report that "slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue."
- Today, the Federal Reserve will kick off its two-day meeting on monetary policy and interest rates. Although the March FOMC meeting is highly unlikely to produce an interest rate jump, investors are focused on the central bank's plans for its massive balance sheet. The question is whether the bank will aim to tighten its enormous balance sheet or allow this mechanism to go untouched with concerns about the U.S. and global economies accelerating. Narayana Kocherlakota, former president of the Minneapolis Federal Reserve Bank, argues that the central bank should actually cut interest rates this month to address expected weakness in the future.
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- This morning, United Kingdom Prime Minister Theresa May asked leaders of the European Union for more time before her country's departure from the world's largest economic trade bloc. Keep in mind; it has now been 1,000 days since UK citizens voted to depart the EU; however, the British government is still no closer to a resolution than it was the day after the Brexit vote. Currently, the UK is set to depart the EU on March 29. All 27 EU nations must agree on any resolution, placing huge pressure on the Prime Minister ahead of her trip to Brussels, Belgium this week. Last week, British lawmakers rejected May's Withdraw Agreement for the second time, despite supporting an extension to Article 50 – which authorizes the Brexit.
Stocks to Watch Today: FB, BAYRY
- Facebook Inc. (NASDAQ: FB) is facing renewed antitrust scrutiny in Europe. This morning, the European Commission hit Google with a fine of $1.69 billion for stifling competitors' advertising networks. The EU said it required publishers to engage in exclusive contracts that prevented rivals' search results from popping up in Google's search results. The accompanying complaint states that Google prevents its rivals from being able to "compete and innovate fairly" in the European online ad market.
- Shares of Bayer AG (OTCMKTS: BAYRY), the owner of Monsanto, slumped more than 8% as the company's legal worries mounted. A jury concluded that Roundup, the most used herbicide in the world, was likely the cause of a California man's cancer. This lawsuit could lead to thousands of other lawsuits.
- Today, look for more earnings reports from General Mills Inc. (NYSE: GIS), Guess? Inc. (NYSE: GES), Micron Technology Inc. (NASDAQ: MU), and Williams-Sonoma Inc. (NYSE: WSM).
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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.