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The Dow Jones today could see meager gains after the latest statements around U.S.-China trade.
The sides have been inching toward a "phase one" solution, but progress has been halted by China's demands that U.S. President Donald Trump limit previously imposed tariffs. I've got more on this below.
Before we get to that, here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.
The Top Stock Market Stories for Wednesday
- Asian stocks were slipping due to silence out of the White House. China has asked the Trump administration to eliminate a number of tariffs that he imposed earlier this year. Ongoing concerns about trade have ignited calls from some equity firms to cut back on higher-risk assets. The longer the trade uncertainty lasts, the higher the probability that we could see a sharp one- or two-day sell-off as investors take recent gains off the table. Stocks are sitting near all-time highs despite concerns about low growth around the world. We are eyeing data from Europe today, as weak German factor orders may spark renewed concerns about recession across the world's largest economic bloc.
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- This morning, I'm paying close attention to a report from Challenger, Gray & Christmas. The report says that 172 CEOs departed their roles in the month of October alone. Now, some of these departures are related to scandals at firms like Under Armour Inc. (NYSE: UAA) or McDonald's Corp. (NYSE: MCD). But one must ask why the number of CEO exits in 2019 is set to break a record. The simple answer could be that's it's a coincidence and that many of them served an average tenure. But the more curious question is whether some CEOs see the market highs as an opportunity to head for the exits before the end of the current economic cycle drags down profits. Pay close attention to this trend into 2020.
- UBS Group AG (NYSE: UBS) reported this morning that investors are facing an earnings recession. The Swiss bank said the ongoing contraction in S&P 500 earnings expectations could easily fuel a stock market correction. The firm said that year-over-year growth for S&P 500 forward earnings has fallen from 23% in 2018 to 1% today. "There is no debate on S&P 500 forward earnings: a contraction appears imminent," UBS told clients Tuesday.
Stocks to Watch Today: MTCH, CVS, WBA, KKR
- Shares of Match Group Inc. (NASDAQ: MTCH) plunged more than 15% after the online dating giant reported weak forward guidance. The firm did top Wall Street EPS expectations and came in line with revenue estimates of $541 million. However, worries about the firm's subscriber base and expected revenue in Q4 dragged the stock lower.
- Shares of CVS Health Corp. (NYSE: CVS) got a boost after the company topped Wall Street earnings expectations for the third quarter. The firm received a 10% profit jump thanks to strong sales from its recently acquired Aetna. CVS reported earnings per share of $1.84, a figure that bested Wall Street forecasts by $0.07. Meanwhile, revenue came in at $63.81 billion, well ahead of the $62.99 billion anticipated by analysts.
- Meanwhile, CVS's key rival, Walgreens Boots Alliance Inc. (NYSE: WBA), is exploring a deal to take the company private. According to reports, the company could become the target of the largest leveraged buyout in the history of the markets. The company has a market capitalization of $55 billion. According to reports, KKR & Co. (NYSE: KKR) is exploring a possible deal that would take the healthcare benefits firm under its wing.
- Look for additional earnings reports from Square Inc. (NYSE: SQ), Roku Inc. (NASDAQ: ROKU), Baidu Inc. (NASDAQ: BIDU), QUALCOMM Inc. (NASDAQ: QCOM), Wynn Resorts Ltd. (NASDAQ: WYNN), Redfin Corp. (NASDAQ: RDFN), and CenturyLink Inc. (NYSE: CTL).
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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.