The Dow Jones Industrial Average is off today as investors anticipate a sell-off following comments from U.S. Federal Reserve Chair Jerome Powell.
He'll speak on the results of some banking stress tests, but investors don't expect any definitive message about Fed rate cuts.
Plus: continuing the Deutsche Bank AG (NYSE: DB) saga. Details below.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
Index
Previous Close
Point Change
Percentage Change
Dow Jones
26,806.14
-115.98
-0.43
S&P 500
2,975.95
-14.46
-0.48
Nasdaq
8,098.38
-63.41
-0.78
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
Virgin Galactic will go public in New York on Tuesday as part of a deal with Social Capital Hedosophia Holdings Corp. (NYSE: IPOA). The latter firm is a special purpose acquisition company that will purchase 49% of entrepreneur and investor Richard Branson's company for $800 million. The deal allows the space exploration company to raise capital to compete with other competitors like Elon Musk's SpaceX and Jeff Bezos' Blue Origin.
Over the weekend, Deutsche Bank AG (NYSE: DB) announced plans to cut 18,000 workers and begin a massive restructuring process to reduce costs by 25%. However, some analysts believe it's "too little, too late" for the German mega-bank. Conditions on the ground in Europe remain uncertain as the Brexit approaches, and plunging interest rates put the continent's banking system on edge. This is one of the largest layoffs at an investment bank since 2008, when Citigroup Inc. (NYSE: C) slashed 14% of its global workforce (or 50,000 people).
While Democrats and Republicans scramble to pass the USMCA - the replacement for NAFTA - by the end of the year, a government shutdown is now more likely. Neither side of the aisle has shown any willingness to discuss mandatory spending caps set to occur in January. Funding will expire at the end of September, and Congress will be on recess for the bulk of August.
Oil prices ticked higher Tuesday as traders continued to speculate on geopolitical tensions and OPEC's efforts to curb production. The American Petroleum Institute is expected to announce that U.S. inventory levels have decreased for the fourth straight week. Also, tensions continue to rise between the United States and Iran after the latter nation's government announced it would continue to enrich uranium to 20%, a figure that threatens the 2015 nuclear deal reached by the Obama administration.
Stocks to Watch Today: PEP, IPOA, CTST
Shares of PepsiCo Inc. (NYSE: PEP) are in focus as the global snack and beverage company reported earnings. PEP stock added 1% in pre-market hours after the firm topped EPS and revenue expectations. The firm reported an EPS of $1.54, a figure that topped consensus expectations of $1.50. Meanwhile, revenue came in at $1.6449 billion, a number that topped forecasts of $16.426 billion. The numbers were backed by stronger organic revenue.
Shares of CannTrust Holdings Inc. (NASDAQ: CTST) plunged more than 22% yesterday after the Canadian government seized its cannabis on speculation it was growing marijuana in unlicensed rooms. Health Canada, the regulators overseeing the production, said that the firm was growing cannabis in an Ontario facility while it was in the process of applying for regulatory approval. The firm announced that its customers would face temporary product shortages while it addresses the problem.
Look for earnings reports from Lindsay Corp. (NYSE: LNN), Levi Strauss & Co. (NYSE: LEVI), Helen of Troy Ltd. (NASDAQ: HELE), and WD-40 Co. (NASDAQ: WDFC).
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