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The Dow Jones Industrial Average is moving in reverse Wednesday as markets digest weak economic data.
Domestic manufacturing has raised red flags, while investors await this morning's update on private payrolls. More on this below.
First, here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
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Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
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The Top Stock Market Stories for Wednesday
- The U.S. economy appears to be slowing down. The question now is how slow it will go. While some analysts are trying to put a positive spin on the data, the simple fact is that manufacturing output fell to its lowest level since June 2009. That's important because that month was the three-month lag of the stock market's nadir that year. Right now, however, we're sitting near all-time highs in the market. It's the tail end of a rally fueled by multiple expansions in price-to-earnings ratios.
- It's crunch time for Brexit negotiations. Prime Minister Boris Johnson is set to give the European Union an ultimatum on his nation's timely departure from the world's largest economic bloc. Reports suggest that Boris wants to scrap the Irish backstop for a customs plan to check goods at the border of Northern Ireland.
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- You may have thought the North Korean leader could allow the geopolitical experts to worry about something else for a change. But Kim Jung Un's country has just fired a ballistic missile designed to deploy from submarines. Japan tracked two missiles and said one of them landed in its economic zone. The launch came not long after President Trump had agreed to restart nuclear talks with the rogue nation.
Stocks to Watch Today: SCHW, AMTD, ETFC, LEN, FB, MA, V
- Shares of Charles Schwab Corp. (NYSE: SCHW) are in focus after the firm eliminated commissions for stocks and exchange-traded funds. Competitor TD Ameritrade Holding Corp. (NASDAQ: AMTD) quickly followed suit. TD Ameritrade's stock fell by 25% on Tuesday, while E*Trade Financial Corp. (NASDAQ: ETFC) shed another 16%. It's clear that the new class of Fintech firms like Robinhood – that's already offered free trades – has taken its toll on the discount brokerage industry. Could consolidation be the most obvious next step? All three of these stocks received downgrades today from Barclays Plc. (NYSE: BCS).
- Shares of Lennar Corp. (NYSE: LEN) popped 3% in premarket trading after the housing giant reported strong quarterly earnings. The homebuilder reported earnings per share of $1.59, easily beating Street estimates of $1.32. Meanwhile, quarterly revenue clocked higher than the same period in 2018. The company reported strong volumes despite currency challenges.
- The Libra cryptocurrency movement could be hitting a snag. According to reports, some members of Facebook Inc. (NASDAQ: FB)'s cryptocurrency network are getting cold feet. Both Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA) are reportedly reconsidering their involvement in the project. In recent months, the Libra Foundation has faced increased scrutiny from both central banks and privacy advocates around the world.
- Look for an additional earnings report from Bed Bath & Beyond Inc. (NASDAQ: BBBY), Paychex Inc. (NASDAQ: PAYX), Acuity Brands Inc. (NYSE: AYI), and RPM International Inc. (NYSE: RPM).
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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.