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The Dow Jones Industrial Average will slide today after the largest single-day crude price uptick in almost four years. Details below.
Here are the numbers from Friday 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 Monday
- Expect to hear the term "Black Swan" or "Grey Swan" a lot on Monday. That's because something happened that everyone in the world should have seen coming, and it's going to have a significant impact on the geopolitical map in the Middle East. Over the weekend, a series of drone strikes knocked out roughly half of Saudi Arabia's daily oil production. Some Wall Street analysts have called this the single greatest supply shock ever. U.S. President Donald Trump has also authorized the release of crude from the nation's Strategic Petroleum Reserve. WTI crude oil was up 10.1% this morning, while Brent crude added nearly 11%. This is the single largest one-day increase for crude prices in the history of the markets. Goldman Sachs Group Inc. (NYSE: GS) predicted that Brent crude prices could climb as high as $75 if Saudi Arabia's production remains offline for an extended period. The attacks knocked out roughly 5% of the global energy supply.
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- But while everyone is busy today talking about Saudi Arabia, I'm focused on the Chinese economy. I'm very concerned about the country's latest report on retail sales growth for August. There appears to be a pullback in Chinese commerce for the first time since April. This signals that the nation's economic growth could be smaller than analysts have expected. Some people have said that China's GDP may fall under 6% this year, a figure that would be catastrophic for its political leaders. The pullback puts added pressure on Chinese officials to reach an accord with the Trump administration over trade.
- OxyContin producer Purdue Pharma has filed for bankruptcy in light of the 2,000 lawsuits it's facing. The company's bankruptcy is part of a $10 billion plan to settle claims against it over the U.S. opioid crisis. The billionaire Sackler family, which owns the firm, would effectively hand over the company to a trust managed by states, cities, and countries that have partnered to sue the firm.
Stocks to Watch Today: GM, CVX, XOM
- Shares of General Motors Co. (NYSE: GM) were under pressure this morning after employees went on strike. This is the company's first major walkout since 2007. Union workers have sought a new contract in recent months. GM shares are off 2.2%.
- The global oil shock pushed up shares of major international energy producers. Shares of Exxon Mobil Corp. (NYSE: XOM) gained nearly 4%, while Chevron Corp. (NYSE: CVX) gained roughly 3.3%.
- No major U.S. companies report earnings on Monday.
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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.