How Earnings Will Fuel a Triple-Digit Rally in the Dow Jones Today

Garrett Baldwin

The Dow Jones today will grow after a stronger-than-expected earnings report from McDonald's. That's only the start to what investors expect will be another day of positive quarterly updates from companies around the globe.

Other items moving the Dow Jones today: surprise earnings from General Electric Co. (NYSE: GE), European economic growth, and Warren Buffett pumping money into oil.

Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

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

• Markets are largely ignoring news out of New York, where the House Oversight Committee is seeking information on the finances of U.S. President Donald Trump, three of his children, and the Trump organization. Trump has sued to block the release of documents from Deutsche Bank AG (NYSE: DB) and Capital One Financial Corp. (NYSE: COF). According to reports, the former, Germany's largest bank, loaned Trump more than $2 billion prior to his winning the presidency. The White House argues that his political opponents are engaged in a fishing expedition.

• Today, we received some positive news out of Europe. Last quarter, the Eurozone saw economic growth of 0.4%, a figure that was double the rate of growth in the previous quarter. The report indicates that global economies are in better health than economists had previously expected. The U.S. economy saw 3.2% economic growth last quarter, while China surprised with a quarterly GDP pop of 6.4%. The developments alleviate some initial concerns that nations will need to turn back to stimulus efforts in order to stimulate growth in the future.
• In deal news, Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A) is putting some money to work. The company announced plans to invest $10 billion in Occidental Petroleum Corp. (NYSE: OXY) this morning. The reason for the investment: to help finance Occidental's proposed takeover of Anadarko Petroleum Corp. (NYSE: APC) in the Permian Basin in West Texas. Last week, Occidental made a rival bid that surpassed Chevron Corp.'s (NYSE: CVX) offer for Anadarko, valued at $33 billion.

Stocks to Watch Today: GOOGL, AAPL, MCD, GE

• Another busy day of earnings reports. Tech stocks are in focus after Alphabet Inc. (NASDAQ: GOOGL) missed Q1 revenue after the bell Monday afternoon. Prior to earnings, GOOGL stock had added 24% since the start of the year. However, this morning, shares are off about 7% after the firm reported that ad revenue was slowing. Although the firm easily topped earnings expectations, a downturn in cost-per-click revenue complemented problems stemming from a $1.7 billion fine from the European Commission earlier in the first quarter.

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• Today, pay close attention to earnings from Apple Inc. (NASDAQ: AAPL). The global tech giant is set to report earnings after the bell Tuesday afternoon. But this morning, the big news came from McDonald's Corp. (NYSE: MCD), a key component on the Dow Jones Industrial Average. The firm reported earnings per share of $1.78, a figure that topped expectations by $0.03. The firm also cruised past revenue expectations and cited a stronger promotional calendar and a simplified menu to win back customers.
• Shares of General Electric Co. (NYSE: GE) popped 9% in pre-market hours after the company topped Wall Street earnings expectations and reaffirmed its 2019 forecast. Despite burning through $1.2 billion in cash to kick-start its turnaround, Wall Street appears happy that the cash burn wasn't worse.
• Look for earnings reports from Advanced Micro Devices Inc. (NYSE: AMD), Arconic Inc. (NASDAQ: ARNC), Blue Apron Holdings Inc. (NYSE: APRN), ConocoPhillips (NYSE: COP), Cummins Inc. (NYSE: CMI), General Motors Co. (NYSE: GM), Lumber Liquidators Holdings Inc. (NYSE: LL), Mastercard Inc. (NYSE: MA), McDonald's Corp. (NYSE: MCD), Pfizer Inc. (NYSE: PFE), Phillips 66 (NYSE: PSX), Twilio Inc. (NASDAQ: TWLO), Welltower Inc. (NASDAQ: WELL), and Wyndham Hotels & Resorts Inc. (NYSE: WH).

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Garrett Baldwin

About the Author

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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.

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