Why the Dow Jones Industrial Average's 100-Point Loss Could Signal Recession

The Dow Jones Industrial Average will dip more than 100 points today as U.S.-China trade tensions grow stronger yet.

Here's how traders are responding.

First, the numbers from Friday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 26,287.44 -90.75 -0.34
S&P 500 2,918.65 -19.44 -0.66
Nasdaq 7,959.14 -80.02 -1.00

Now, here's a look at today's Money Morning insight, the most important market events, and stocks to watch.

The Top Stock Market Stories for Monday

  • The ongoing trade dispute between the United States and China could tip several major economies into a recession. In addition, investors are paying very close attention to China's currency. The nation's central bank set the yuan on the weaker side of the 7-per-U.S.-dollar level for the third consecutive trading session. A weaker yuan could help bolster the nation's exports. Meanwhile, traders continued to pour out of stocks and into the bond market. The U.S. 10-year bond price fell to 1.7%.
  • Markets are also paying close attention to violent protests in Hong Kong. This morning, Hong Kong International Airport cancelled all departing flights for the rest of the day. Pro-democracy protests have caused major disruptions, and roughly 5,000 protesters demonstrated at the airport for the fourth consecutive day. The protest movement started two months ago, after China pushed a bill that would allow extradition from Hong Kong to the mainland. Some protesters are calling for complete autonomy from China.
  • Oil prices are in focus after Saudi Aramco reported a 12% decline in profits during the first half of the year. It was a rare disclosure of finances for the massive energy company and underscores the ongoing weakness in commodity prices. The announcement will likely once again stir interest in a Saudi Aramco IPO on the U.S. markets. The Saudi government is considering an IPO to help fund other projects that would diversify the nation's economy. This morning, WTI crude oil was off 0.5% to hit $54.23 per barrel. Brent crude shed 0.5% to hit $58.20.

Stocks to Watch Today: BLK, CLDR, GOLD

  • BlackRock Inc. (NYSE: BLK) made another big acquisition. The company purchased a majority stake in Authentic Brands, the firm behind brands like Nine West, Aeropostale, and Sports Illustrated. The Wall Street Journal reported this morning that the asset manager's stake is worth $875 million.
  • Shares of Cloudera Inc. (NYSE: CLDR) added 2% in pre-market hours after the cloud computing firm announced it had reached an agreement with hedge fund manager Carl Icahn. The deal will allow Icahn - who owns an 18% stake in the firm - to take two seats on the board of directors. Icahn has agreed not to increase his stake in the firm above 20% and will not aim to gain additional representation on the board.
  • Look for additional earnings reports from Barrick Gold Corp. (NASDAQ: GOLD), Ceragon Networks Ltd. (NASDAQ: CRNT), Sysco Corp. (NYSE: SYY), and Bloom Energy Corp. (NYSE: BE).

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