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The Dow Jones today is rallying 200 points after a major policy development in Hong Kong.
I've got more on this and other geopolitical factors (e.g., Brexit) moving the Dow, below.
But first, here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
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
- Tensions in Hong Kong should ease this morning after leader Carrie Lam officially withdrew a controversial extradition bill. This is one of the five major demands that protesters have sought during the ongoing demonstrations across the region. The decision comes in the wake of the city's most violent day of protests since the rallies started in June. The proposed extradition bill would have allowed for individuals to be sent back to mainland China for trials. Protesters are still seeking four other demands: the retraction of any characterization of their movement as a "riot," the removal of any charges against protesters, an independent investigation of the Hong Kong police force, and universal suffrage in elections for the city's legislature and CEO by 2020.
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- Britain's Parliament has blocked Prime Minister Boris Johnson's threat to pull the United Kingdom out of the European Union without a deal. In a 328 to 301 vote Tuesday, a motion passed that would force Johnson to seek a three-month extension to the Brexit, should the nation fail to reach a deal by Oct. 31. Johnson threatened to force a snap election; however, he likely lacks the support in the House of Commons to achieve that goal.
- While investors cheer the Brexit delay and positive steps in Hong Kong, here's what worries me this morning. A few months ago, I warned about the stability of the Italian banking sector. All seemed rosy at the time, and the iShares MSCI Italy Index (NYSEArca: EWL) was sitting near a 52-week high. But it's pulled back since that warning. Today, the Euro is sitting at a 16-month low as Brexit, trade woes, and weak economic growth in Germany hammer the currency. But it's the Italian banking crisis that continues to simmer under the surface. If banking failures pick up across the continent, look at Italy as the launching point.
Stocks to Watch Today: WMT, KR, BOX, AAPL
- Walmart Inc. (NYSE: WMT) surprised investors Wednesday after it announced plans to halt sales of handgun and certain rifle ammunition in the United States. In addition, the firm called for new gun safety laws following several mass shootings in Texas. The timing is interesting as corporate America has been shifting its focus from maximizing shareholder value to implementing policies that benefit stakeholders that include the community and environment. Kroger Co. (NYSE: KR) followed Walmart Tuesday with a similar call for gun control. The grocer asked customers to stop openly carrying guns into its stores.
- Look for shares of Box Inc. (NYSE: BOX) to rally on Wednesday. One of the top activist hedge funds, Starboard Value, purchased a 7.5% stake in the cloud computing company. Starboard Value called the company "undervalued" and became its second-largest shareholder after Vanguard Group.
- Looking for proof that Apple Inc. (NASDAQ: AAPL) is indeed struggling? The iconic iPhone maker announced that it will debut an inexpensive iPhone model in early 2020, according to Nikkei news service. The release aims to address the firm's struggles to maintain market share. AAPL stock was up 1.4% in pre-market hours.
- Look for earnings reports from Palo Alto Networks Inc. (NYSE: PANW), MongoDB Inc. (NYSE: MDB), Cloudera Inc. (NASDAQ: CLDR), Slack Technologies Inc. (NASDAQ: WORK), American Eagle Outfitters (NYSE: AEO), Michaels Cos. Inc. (NYSE: MIK), and Navistar International Corp. (NYSE: NAV).
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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.