The Dow Jones today is rising with investors surprisingly optimistic about a possible trade deal between the United States and China.
I say "surprisingly" because U.S. President Donald Trump has taken multiple swipes at China, and the U.S. is penalizing Chinese oil shipment firms. JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon also said Wednesday he doesn't expect a deal before the 2020 election.
Before we dive deeper into why those factors matter, here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
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
- The transcript release of President Trump's call with Ukraine's leader hasn't fanned the flames of the new impeachment inquiry. Markets largely brushed off concerns about impeachment, but things could change quickly with new revelations. Acting Director of National Intelligence Joseph Maguire will testify before the House Intelligence Committee today. In addition, Senate Democrats are pushing for a whistleblower complaint against Trump to be made public. Expect a lot of drama as Democrats attempt to build a movement to remove Trump from office.
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- Louis Fed President James Bullard said Wednesday that the inquiry wouldn't impact the U.S. central bank. The Fed member instead noted that the real challenge was the ongoing trade war with China. Bullard seemed to be reiterating the subtle message sent to Trump by Jerome Powell after the Fed cut rates again last week. The message is that it's time for Trump to fix trade relations and that the Fed had done its part to support the U.S. economy. Bullard continues to beat the drum for additional rate cuts. His stance is to lower rates until they are on par with banks around the globe.
- Oil traders just can't get a break. The United States is now imposing penalties on Chinese tankers for carrying Iranian crude oil. This doesn't just increase volatility. It also complicates an already fragile situation between the U.S.and China ahead of renewed trade talks. Asian markets are clinging to hope for a trade deal, but cracks are forming in U.S. sentiment. This morning, the price of WTI crude was flat, while Brent crude was off marginally.
Stock to Watch Today: MO, PM, BYND
- Shares of Altria Group Inc. (NYSE: MO) are under pressure. The cigarette manufacturer is a major investor in Juul Labs, an electronic-cigarette company facing scrutiny from regulators. On Wednesday, Juul CEO Kevin Burns stepped down. His departure comes as states explore bans on e-cigarettes due to alleged product marketing to teens. Meanwhile, merger talks continue between Altria Group and Phillip Morris International Inc. (NYSE: PM). The developments have some critics openly calling for the collapse of Altria. One CNBC commentator said Wednesday on air that he hopes MO stock "goes to zero."
- Shares of Beyond Meat Inc. (NASDAQ: BYND) popped more than 16% on news that McDonald's Corp. (NYSE: MCD) will test a new plant-based burger in key Canadian markets. The sandwich is a "PLT" - or a plant, lettuce, and tomato sandwich. Testing will take place in 28 restaurants.
- Look for earnings reports from Micron Technology Inc. (NASDAQ: MU), Accenture Plc. (NYSE: ACN), Conagra Brands Inc. (NYSE: CAG), Vail Resorts Inc. (NYSE: MTN), Rite Aid Corp. (NYSE: RAD), and CalAmp Corp. (NASDAQ: CAMP).
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.