The Dow Jones Industrial Average Is Flat as the Trade War Dashes Earnings Expectations

Garrett Baldwin

The Dow Jones Industrial Average will not see much growth today, as a number of big Dow components are feeling the impacts of the U.S.-China trade war.

McDonald's Corp. (NYSE: MCD) fell short of earnings expectations. MCD stock dipped 3%, setting a weak tone for a busy earnings day. Investors anticipate further weakness in the broader market indexes.

Many blame the trade war between the United States and China on lower sales and higher shipping costs. I'll address these stories further in the column below.

But first, here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

Here are the most important market events and the stories that I'm following right now.

The Top Stock Market Stories for Tuesday

• Earnings season is now in full swing, so expect a lot of movement this week in stock prices. This morning, McDonald's Corp. (NYSE: MCD) saw its shares dip 3% after the fast food giant fell short of profit and revenue expectations. The company did, however, announce it is pushing delivery as a major source of revenue growth. McDonald's wants to deliver roughly $4 billion in delivery sales in 2019.

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• Today, pay close attention to events in the United Kingdom. Investors should prepare for two votes by Parliament on whether to support a split from the European Union. The first vote centers on how Brexit would occur. Prime Minister Boris Johnson expects to win this vote. However, the second vote brings greater uncertainty. This vote centers on whether Boris Johnson can push through his Brexit bill for a formal vote by Thursday of this week. The two votes come just days after Parliament delayed a vote and forced the British government to seek a deadline extension from the European Union.
• Finally, the United States and China continue to haggle over global trade. China's Foreign Vice Minister Le Yucheng said that the two nations have made increasing progress on a deal. He also said that any ongoing animosity between the two nations can be resolved so long as the two showed mutual respect moving forward. That said, the ongoing trade dispute is likely to weigh on corporate earnings and economic growth moving forward. Expect to hear a lot of companies that are reporting earnings mention the trade dispute during the quarterly conference calls.

Stocks to Watch Today: UAA, BIIB, HAS

• Shares of Under Armour Inc. (NYSE: UAA) pushed higher Tuesday after it announced that Chair Kevin Plank would no longer be CEO. The company's COO, Patrick Frisk, will step into the role of CEO on Jan. 1. Plank will move into the role of Executive Chair. UAA stock added 2.2% this morning.
• Shares of Biogen Inc. (NASDAQ: BIIB) rallied more than 36% this morning after the firm received good news for its Alzheimer's drug, aducanumab. A promising drug trial has led the biotech giant to file for approval with the U.S. Food and Drug Administration. This is welcome news for the company, as it had ended two late-stage trials for the same treatment on concerns that the drug wouldn't succeed. Shares of BIIB stock were off nearly 33% this year before this morning's huge announcement.
• Shares of Hasbro Inc. (NYSE: HAS) plunged more than 10% after the toy-maker reported weak earnings and issued a chilling forecast on its forward guidance. The firm reported earnings per share of $1.84. That figure was well below the consensus forecast of $2.21. The firm said that ongoing trade disputes between the United States and China were not only impacting sales, but also increasing the cost of shipping and warehousing products. Hasbro's downturn weighed on other companies in the sector.
• Look for earnings reports today from Chipotle Mexican Grill Inc. (NYSE: CMG), Texas Instruments Inc. (NYSE: TXN), United Technologies Corp. (NYSE: UTX), United Parcel Service Inc. (NYSE: UPS), Procter & Gamble Co. (NYSE: PG), Harley-Davidson Inc. (NYSE: HOG), Lockheed Martin Corp. (NYSE: LMT), and JetBlue Airways Corp. (NASDAQ: JBLU).

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Garrett Baldwin

About the Author

Browse Garrett's articles | View Garrett's research services

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.

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