Why The Dow Jones Today Could Pop on Trade War News

The Dow Jones today is treading water as investors wait for the latest news on the trade war front. Stocks fell on Friday after reports said the United States was planning on restricting investments into China.

But a breakthrough could be in the offing.

This morning, China released its latest manufacturing data, and economic growth is still weak, a sign the country could be inching closer to making a deal. The nation's official Purchasing Managers' Index showed a 49.8 rating in September. While that figure was an improvement from August, it still fell below the 50-point mark and shows the industry is contracting.

Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 26,820.25 -70.87 -0.26%
S&P 500 2,961.79 -15.83 -0.53%
Nasdaq 7,939.63 -91.03 -1.13%

Now here are what I think will be the most important market events and stocks on Monday morning.

The Top Stock Market Stories for Monday

  • Once again, the markets showed increased optimism over upcoming trade negotiations between the United States and China. The two nations are poised to meet in Washington, D.C., on Oct. 10 to restart discussions on a possible deal to remove tariffs and jump-start trade. However, JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon has expressed doubt that the countries will reach a deal before the 2020 election. Meanwhile, U.S. trade adviser Peter Navarro denied reports that the United States was considering a rule that would limit American investments into China at "this time." Reports of such a plan drove down stocks on Friday afternoon.
  • Members of the U.S. Federal Reserve have been making rounds to discuss future action by the Federal Reserve. St. Louis Fed Bank President James Bullard has been pushing for additional cuts to bolster the U.S. economy. On Monday, Chicago Fed Bank Chief Charles Evans surprised CNBC viewers by stating he was "open-minded" about future rate cuts if the U.S. economy faces additional headwinds.
  • Finally, the impeachment circus will remain on full display in Washington Monday. House Intelligence Committee Chair Adam Schiff said that the "whistleblower" who reported U.S. President Donald Trump's call with Ukraine's president will testify "very soon." First, however, the individual (whom The New York Times outed as a member of the CIA) must complete a clearance process.

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Stocks to Watch Today: AAPL, BX, CLNY, TSLA

  • Shares of Apple Inc. (NASDAQ: AAPL) received a big upgrade from JPMorgan. The investment bank suggested that Apple stock might pop another 20% following the release of its iPhone 11. JPMorgan "modestly" increased its sales forecasts for the lower-priced model. It also said it expects that Apple will unveil three 5G enabled iPhones in September 2020. The firm raised its price target on AAPL stock from $243 to $265.
  • In deal news, private equity giant Blackstone Group Inc. (NYSE: BX) announced that its Real Estate Partners IX division is set to purchase Colony Industrial from Colony Capital Inc. (NASDAQ: CLNY) for $5.9 billion. Shares of CLNY popped more than 6% on the news. BX shares gained o.5%.
  • Shares of Tesla Inc. (NASDAQ: TSLA) were off this morning as the company faces new legal challenges. On Friday, a judge ruled that the auto manufacturer took part in unfair labor practices. The company reportedly discouraged its employees from organizing and joining a union.
  • Look for earnings reports from Thor Industries Inc. (NYSE: THO) and Cal-Maine Foods Inc. (NASDAQ: CALM).

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