The Dow Jones Industrial Average Flies Out of the Gate on Trade with China

The Dow Jones Industrial Average could gain more than 100 points today as investors continue to cheer trade developments between the United States and China.

Over the weekend, U.S. Commerce secretary Wilbur Ross announced that the government would grant licenses for U.S. companies to sell to Chinese telecom firm Huawei in the near future. But that's not the only thing moving the Dow today...

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

Index Previous Close Point Change Percentage Change
Dow Jones 27,347.36 +301.13 +1.11
S&P 500 3,066.91 +29.35 +0.97
Nasdaq 8,386.40 +94.04 +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

  • First up, markets continue to show positive momentum after last week's positive round of earnings reports, economic data, and more. On Friday, the U.S. Labor Department announced that the economy had added 128,000 new jobs in October, a figure that easily topped economists' expectations. Meanwhile, as earnings season continues, roughly 75% of S&P 500 firms that have reported this season have topped Wall Street earnings expectations.

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  • While investors are focusing on trade between the world's two largest economies, geopolitical tensions are again rising across the globe. On Monday, Chinese state media released a threat to Hong Kong protesters and condemned the pro-democracy rallies across the region. Chinese media outlets are calling for tougher repercussions against protesters. The call comes after one of the most violent weekends of the year. More protests are scheduled for later this week as residents continue to press for an investigation into police practices.
  • Finally, Saudi Aramco released a few details around its planned IPO. The Saudi state-owned oil giant will go public and likely value the firm at roughly $1.5 trillion. Although that figure is 75% below the country's initial goals, it is likely going to garner significant attention from funds around the globe. Saudi Arabia is looking to flow about 5% of the company on the public market and use the capital raised to help diversify the Saudi economy.

Stocks to Watch Today: UAA, MCD, BRKA

  • Shares of Under Armour Inc. (NYSE: UAA) are off more than 14% after the company slashed its full-year earnings outlook. In addition, the firm is subject to a federal investigation around its accounting practices. The Wall Street Journal is investigating whether the firm shifted its sales from quarter to quarter in order to improve its bottom line and bolster its stock performance. All of this news broke around its quarterly earnings report. The firm reported earnings per share of $0.23, a figure that beat expectations by $0.05.
  • Shares of McDonald's Corp. (NYSE: MCD) were sliding this morning on news that the firm's board of directors fired CEO Steve Easterbrook. The fast food giant released its CEO after he had a consensual relationship with a company employee that violated the firm's policies. The company announced that its U.S. president, Chris Kempczinski, will assume the role of CEO.
  • Berkshire Hathaway Inc. (NYSE: BRK.A) reported earnings on Saturday. Warren Buffett's firm announced that profits topped Wall Street expectations thanks to resilient consumer spending. The firm's success came despite ongoing trade disputes between the United States and China and threats of new tariffs. The firm's operating income ticked up to $4.82 per Class A share. That figure is up nicely from the $4,189 that the firm reported in the same period in 2018. The company is now sitting on a record $128.2 billion in cash.
  • Look for additional earnings reports from Uber Technologies Inc. (NYSE: UBER), Marriott International Inc. (NYSE: MAR), Gannett Co. Inc. (NYSE: GCI), Pioneer Natural Resources (NYSE: PXD) and Cimarex Energy Co. (NYSE: XEC).

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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.

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