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The Dow Jones today will stay flat – after some correction from Monday's big losses.
Although the People's Bank of China set a midpoint for the yuan, investors are still grappling with further trade war prospects.
More on this below. Plus: The results are in, and Walt Disney Co. (NYSE: DIS) is off. Here's why…
First, 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
- U.S. Treasuries hit their lowest levels since October 2016 as investors around the globe continue to flock to the American bond markets. European nations remain mired in negative interest rates and concerns about U.S. trade with China. More investors are worried about a global recession in the next three quarters.
- The Chinese yuan is in focus days after the United States labeled its economic rival as a "currency manipulator." Today, the People's Bank of China set the official midpoint reference for the yuan at 6.9996 per U.S. dollar. The yuan has been falling against the greenback over the last few months as the United States and China engage in a trade war. With that said, the new setting of the yuan is almost at its weakest levels since March 2008. A weaker yuan is a tool that China can use to make its exports more attractive and cheaper to customers around the globe. It helps reduce the impact of tariffs in the United States.
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- U.S. trade tensions pushed oil prices to seven-month lows. WTI crude oil slumped another 0.6%, while Brent crude slid to $58.58 after a 0.6% decline. Ongoing trade tensions offset any geopolitical bump from concerns over shipping safety in the Middle East. In addition, markets largely shrugged off news that U.S. crude inventory levels slid by 3.4 million barrels last week.
Stocks to Watch Today: DIS, CVS, CBM
- Shares of the Walt Disney Co. (NYSE: DIS) were off 3.5% in pre-market hours after the entertainment giant fell short of earnings expectations Tuesday. The firm announced larger-than-expected losses from its streaming businesses as it ramps up investment in Hulu, ESPN+, and Disney+. The company reported earnings per share of $1.35, well short of the $1.75 expected by analysts. In addition, revenue was under expectations. The firm clocked in $20.25 billion in revenue, a figure that was off from the consensus by $1.22 billion. The firm cited the ongoing integration of its new Fox assets as another reason for the weaker report. That said, its Studio Entertainment group reported a whopping 33% increase in revenue from the same period last year.
- Shares of CVS Health Corp. (NYSE: CVS) popped 5.6% in pre-market hours after the health benefits company topped Wall Street earnings expectations. The firm easily topped EPS of $1.89 on top of $63.43 billion in revenue. Both figures topped consensus expectations of $62.65 billion in revenue. The surprise earnings report came not long after the firm had released guidance expectations well below analysts' forecasts. The next challenge for CVS will be to integrate health insurance giant Aetna, which it purchased in 2018.
- In deal news, shares of Cambrex Corp. (NYSE: CBM) popped more than 47% in pre-market hours after it agreed to be acquired by an affiliate of Permira funds for $60 per share. The deal will be worth $2.4 billion, including assumed debt.
- Look for earnings reports from Roku Inc. (NASDAQ: ROKU), Booking Holdings Inc. (NASDAQ: BKNG), Skyworks Solutions Inc. (NASDAQ: SWKS), Lyft Inc. (NASDAQ: LYFT), CenturyLink Inc. (NYSE: CTL), and Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA).
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