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The Dow Jones Industrial Average is pointed down this morning after Speaker of the House Nancy Pelosi (D-CA) announced an inquiry into the impeachment of President Donald Trump.
Yesterday, the S&P 500 and the Nasdaq saw their largest one-day drops in September after Pelosi made the announcement. Today, I'm going to discuss why this new impeachment inquiry is such an important deal for the markets… and a huge gamble for Washington Democrats.
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
- President Donald Trump took a sharp tone on Tuesday while speaking at the United Nations. Standing before a group of diplomats, Trump issued a broader populist message: "The future does not belong to globalists." Trump bashed the UN for allowing China to join the organization on the hopes that the country would liberalize its economy and become more transparent. He argued that China hasn't quite done what was expected by the general assembly. That tone could potentially disrupt the momentum of trade talks between the United States and China that are set for the next few months.
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- Meanwhile, in Washington D.C., Democrats crawled over one another to issue condemnations of President Trump and call for his formal impeachment. Democrats are demanding greater transparency from Trump and the release of phone records involving calls with Ukrainian diplomats. That said, the impeachment procedure isn't likely to lead to Trump's departure from the White House. But it could lead to a lot of fighting among Congressional leaders. It could also be enough to distract them from getting other things done, like ratifying the new USMCA trade deal. Meanwhile, it could hinder Trump's team from establishing a good trade framework with Chinese officials.
- Oil prices continue to retreat following President Trump's negative comments about China at the United Nations. Markets quickly raised concerns that a deal between the United States and China isn't likely to come. This morning, WTI crude fell 1.6% to hit $56.34, while Brent crude fell 1.7% to hit $62.00.
Stocks to Watch Today: PM, MO, NKE, AMZN
- Shares of Philip Morris International Inc. (NYSE: PM) and Altria Group Inc. (NYSE: MO) both popped this morning, 7% and 4%, respectively. The rally comes after the CEO of e-cigarette firm Juul stepped down. The news comes as multiple states take aim at vaping and threaten to ban the practice due to a recent health scare from black market vaping products. Meanwhile, both PM and Altria have dropped their merger talks, news that pleased investors.
- Shares of Nike Inc. (NYSE: NKE) popped more than 4.6% this morning after the company reported stronger-than-expected earnings on Tuesday. The company reported earnings per share of $0.86 for the quarter ending in August. That was a 28% jump from the previous year. The company also saw a 7% increase in revenue and stronger gross margins.
- Amazon.com Inc. (NASDAQ: AMZN) will make some noise today in the electronics markets. The company will unveil a string of new products during a press event in Seattle. The firm is likely to display products that incorporate its proprietary Alexa assistant. Analysts anticipate Alexa products that will go in your home and on your body (think heart rate monitors, watches, sensors, and even glasses). Stay tuned.
- Look for an additional earnings report from KB Home (NYSE: KBH), AAR Corp. (NYSE: AIR), Ascena Retail Group Inc. (NASDAQ: ASNA), Pier 1 Imports Inc. (NYSE: PIR), HB Fuller Co. (NYSE: FUL), and Worthington Industries Inc. (NYSE: WOR).
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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.