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The Dow Jones today is getting a lift from a new Brexit deal. It's still uncertain whether parliament will approve, but it's a positive day for the embattled prime minister.
The news in Europe offset statements by China this morning. Chinese officials have said that the United States must cancel new tariffs if it has any hope for reaching a trade deal.
Before we dive in, here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
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Now, here's a closer look at what I'm following today. These are the most important market events and stocks to watch.
The Top Stock Market Stories for Thursday
- The European Union and the United Kingdom have drafted an agreement on a new deal for a Brexit. The news sent the pound surging, while the U.S. dollar, gold, and other safe-haven assets saw outflows of capital. Leaders finished the deal just in time for everyone to get their picture in the paper during summit talks in Brussels, Belgium. Of course, this is just a piece of paper for the moment. It remains unclear if parliament will approve the new proposal, but this morning is a positive day for the embattled prime minister.
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- Brexit may be all the news in Brussels, but the real story centers around income ECB Chair Christine Lagarde. Reports state that Mario Draghi's opponents are pushing back against recent stimulus efforts. They seek a cessation on any bond-buying program when Lagarde takes the job in the months ahead. Leaders at the Austrian, Dutch, French, and German banks have all pushed for changes in speeches this week. The key warnings have centered around the ECB's potential desire to overlap monetary and fiscal policy - which could impact whatever perception of independence remains at the central bank. This report coincided with a CNBC report that the Federal Reserve may pause its rate-cutting cycle, citing statements from Chicago Fed President Charles Evans.
- Finally, General Motors Co. (NYSE: GM) and the United Auto Workers union have reached a tentative agreement to end an employee strike after 31 days. While deals remain unavailable, a plan will allow roughly 50,000 employees to return to work pending approval. The five-week affair has already caused economic pain in Michigan and rippled down the auto giant's supply chain. It still could be another week before both sides ratify the agreement.
Stock to Watch Today: T, MS, NFLX
- Shares of AT&T Inc. (NYSE: T) are in focus after its union formally opposed efforts of activist hedge fund Elliott Management to bolster shareholder value. The union suggests that Elliott's proposed shakeup would cost up to 30,000 jobs. Paul Singer's group never called for any job cuts. However, the hedge fund could easily bring on a proxy battle to push its aggressive cost-cutting and asset-selling agenda through in the year ahead.
- Shares of Morgan Stanley (NYSE: MS) popped more than 3.5% after the investment bank topped Wall Street earnings expectations. The firm reported a 3% gain in year-over-year profitability thanks to a strong uptick in bond-trading activity. This was the latest strong report from Wall Street firms.
- Shares of Netflix Inc. (NASDAQ: NFLX) surged more than 8% after the streaming giant topped earnings expectations on Wednesday. The company reported earnings per share of $1.47, well above consensus expectations of $1.04. Revenue came in just shy of expectations. While the firm did see strong growth in international subscribers, the bigger question mark centered around U.S. growth. Domestic paid subscriber additions came in well below expectations. And that is ahead of the launch of Walt Disney Co.'s (NYSE: DIS) upcoming streaming service, Disney Plus.
- Look for additional earnings reports from Honeywell International Inc. (NYSE: HON), Intuitive Surgical Inc. (NASDAQ: ISRG), and Phillip Morris International Inc. (NYSE: PM).
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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.