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The Dow Jones today will face downward pressure despite the likelihood of lower Fed rates. Details below.
Also: Facebook Inc. (NASDAQ: FB) just announced it's working on augmented-reality glasses with the team behind Ray-Ban.
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
- Today is big day for Fed Chair Jerome Powell. It seems that no matter what the central bank does with rates on Wednesday, a large swath of people will criticize the decision. While a rate hike is expected, the central bank is unlikely to hint at any future moves on interest rates and policy. I fully expect a rate cut later today, but I think we're setting up for uncertainty and volatility if the Fed doesn't clue investors in a little more. Trade uncertainty still exists, and just because China and the United States plan to meet in October doesn't mean that a deal will arrive before the 2020 election.
- FedEx Corp. (NYSE: FDX) is leading the sell-off in the markets on Wednesday. The company's earnings report flat-out bombed and raised new concerns about ongoing trade tensions between the United States and China. Shares of FDX stock are off 10.5% this morning. Of course, it's not just the trade war that caused FedEx to cut its profit forecast. The company also said goodbye to its partnership with Amazon.com Inc. (NASDAQ: AMZN). This is another example of Amazon's ongoing cannibalization of the U.S. economy. Given that Congress is currently engaging in antitrust debates, FedEx might suddenly become a major talking point for politicians who want to break up the e-commerce giant.
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- Oil prices continue to retreat this morning as Saudi Arabia claims it will be able to restore its lost output by the end of the month. The oil producer saw a massive drone strike knock out about 5.7 million barrels per day over the weekend. The U.S. government has said it plans to unveil evidence that Iran was behind the attacks. However, U.S. President Donald Trump has said that he wishes to avoid military action against the country. The key thing to remember this morning is that Iran has said it will not meet with the United States during the General Assembly of the United Nations and suggested it is ready for war. This saber-rattling comes just a week after President Trump shook up his national security team and saw the departure of uber-hawk John Bolton. This morning, WTI crude oil is off 1.6%, while Brent crude fell 1.3%.
Stocks to Watch Today: MO, PM, FB, GIS
- Shares of Altria Group Inc. (NYSE: MO) are facing additional pressure after Congress threatened to subpoena the e-cigarette maker Juul for failing to cooperate in a probe into marketing practices. An ongoing investigation into vaping practices has put a major target on the back of Altria, which just announced plans to merge again with Philip Morris International Inc. (NYSE: PM). Both firms have made a significant bet that vaping will help make up for the dwindling cigarette market in Western nations. But government intervention on vaping products (due to a national health scare) and the moral panic around marketing tobacco to teens could hammer both stocks in 2020 and beyond.
- Out: Apple Glass. In: Facebook Orion. According to reports, Facebook Inc. (NASDAQ: FB) is working on augmented-reality glasses with Ray-Ban producer Luxottica. The company hopes that the smart glasses will arrive on shelves by 2023, 2024, or 2025. The company says that the new project - dubbed Orion - will allow users to connect to smartphones, share information on a small display screen, and live-stream their vantage points to social media followers and friends.
- In earnings news, General Mills Inc. (NYSE: GIS) shares are off 2.7%. The food producer topped earnings per share estimates by $0.02 and reported $0.79. The company said it saw stronger gains in its retail sales. However, it saw a drop in revenue compared to forecasts and reported weaker sales in other global markets.
- Look for an additional earnings report from Herman Miller Inc. (NASDAQ: MLHR).
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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.