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The Dow Jones today will gain nearly 300 points on news that the United States and China will meet in October to discuss a resolution to the trade war.
On the flip side: Negative interest rates are coming to the U.S., but you didn't hear it from me - take it from Alan Greenspan...
I'll start with the numbers from Wednesday 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 Thursday
- On the macroeconomic side, markets are cheering the news that the United States and China are poised for a meeting in October. But U.S. businesses and consumers are still very unhappy with the lack of progress. A planned meeting doesn't do much for consumers paying tariffs over the next 60 days. And businesses are struggling to properly plan their purchasing with so many changes to U.S. tariff policy. Today, General Motors Co. (NYSE: GM) CEO Mary Barra will meet with U.S. President Donald Trump to discuss jobs and the economy. The meeting comes not long after Trump criticized the auto giant for cutting jobs and shuttering plants in Ohio and Michigan, two key states for the 2020 election.
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- If you think the political situation is bad in the United States, click your heels three times and be thankful that you're not in the United Kingdom. Parliament derailed Prime Minister Boris Johnson's plan for Brexit on Oct. 31. His plan for a snap election was soon rejected as well. Johnson is trying now to appeal to the public for an election so that he can obtain a majority. Two things could now happen: Johnson could be forced to delay Brexit for another three months while Britain seeks a new deal - or we might just see the shortest tenure in modern history for a Prime Minister.
- While the markets are hyper-focused on the big-ticket trade and political stories, too many people are still ignoring falling interest rates. Right now, there is roughly $20 trillion in global bonds that are paying negative returns. Simply put, we are in a bond bubble, and it's going to end badly. Most of this debt exists in Europe. However, former Federal Reserve Chair Alan Greenspan said this week that "negative interest rates" are coming to U.S. shores. I'll be digging deeper into what this means for investors and how you can protect yourself in the months ahead.
Stock to Watch Today: WORK, UBER, LYFT
- Shares of Slack Technologies Inc. (NYSE: WORK) plunged more than 12% after the bell Wednesday. The firm posted its first earnings report since going public, and the outlook was just bad. The firm lost $0.14 per share and reported revenue of $145 million. While both figures topped already-low expectations, the company's outlook didn't impress. This is the latest unicorn to rush to the public markets only to see its stock sink like a stone.
- Speaking of unicorns, Uber Technologies Inc. (NYSE: UBER) and Lyft Inc. (NASDAQ: LYFT) are also struggling, with both falling to all-time lows this week. The two ride-sharing giants continue to struggle since they went public. Neither firm is expected to be profitable in 2020 or 2021. Even worse, both are bleeding money. Uber reported a $5.2 billion loss in the second quarter. Lyft lost roughly $650 million during the same period.
- Don't look now, but another unicorn that has no business filing to be a public company is about to launch its IPO. WeWork filed paperwork last month to go public, and it might be one of the worst S-1s that I've ever seen. The company may never be profitable, and that's just one of the problems. The company is facing a number of lawsuits from several employees, it continues to struggle to retain key talent, and investors are naturally concerned about the unchecked power of its CEO due to its corporate governance structure. My advice: Steer very clear of WeWork when it goes public. Don't try to day-trade it. Don't try to make money on a "pop" when it goes public. Ignore it. The stock will likely fall by 30% in its first six months.
- Look for additional earnings reports from Lululemon Athletica Inc. (NASDAQ: LULU), DocuSign Inc. (NASDAQ: DOCU), Zoom Video Communications Inc. (NYSE: ZM), Zumiez Inc. (NASDAQ: ZUMZ), Ciena Corp. (NASDAQ: CIEN), and National Beverage Corp. (NASDAQ: FIZZ).
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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.