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The Dow Jones Industrial Average is sinking Wednesday as investors digest a wild speech by President Trump.
On Tuesday night, Trump spoke at the Economic Club of New York and railed against the Federal Reserve on interest rates and monetary policy. But that's just one of the many stories driving market behavior this morning.
Before we get to them, 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.
The Top Stock Market Stories for Wednesday
- This morning, investors are trying to make sense of President Donald Trump's Tuesday night speech. Trump railed against the Federal Reserve over interest rates and claimed that the central bank is capping the upside of the markets. Rather than discussing progress on trade with China, Trump criticized the Fed for not lowering interest rates. It's worth noting, however, that the Dow is up 50% since Trump's election. The S&P 500 is up 45%, and the Nasdaq has gained 60% in three years. "And if we had a Federal Reserve that worked with us, you could have added another 25% to each of those numbers, I guarantee you that," Trump said.
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- We're also paying close attention to the key inflation gage for the U.S. economy. The U.S. Labor Department will release the Consumer Price Index for October this morning. Economists expect that consumer prices increased 0.3% compared to the same period last year. That figure would promote an inflation rate of 1.7% annually, well below the 2% target of the Federal Reserve. This reading will play a major role in the Federal Reserve's final meeting of the year in December.
- Finally, Federal Reserve Chair Jerome Powell will testify before Congress this morning on monetary policy and the state of the U.S. economy. Powell's testimony was supposed to be relatively tame during his semi-annual appearance before a joint committee. However, President Trump's comments on Tuesday evening will likely fuel additional questions about the rift between the White House and the U.S. Central Bank.
Stocks to Watch Today: CSCO, GOOGL, NKE, AMZN
- Shares of Cisco Systems Inc. (NASDAQ: CSCO) are in focus as the company prepares to release earnings Wednesday. Investors anticipate that the firm will report earnings per share of $0.83 on top of $13.1 billion. However, shares could slide today as investors fear that the ongoing trade war with China may lead to a possible earnings miss. Pay attention to the report when the market closes later today.
- Alphabet Inc. (NASDAQ: GOOGL) – the parent of search giant Google – announced that it will enter the finance sector in 2020. The company announced it will offer checking accounts to users next year. The firm has partnered with Citigroup Inc. (NYSE: C) and the Stanford Federal Credit Union. This is the latest big move by the technology sector to disrupt the banking space.
- Nike Inc. (NYSE: NKE) announced it will no longer sell its products on Amazon.com Inc. (NASDAQ: AMZN). The decision ends a two-year pilot program between the sports apparel giant and America's largest e-commerce company.
- Look for earnings reports from Trip.com Group Ltd. (NASDAQ: CTRP), Teekay Corp. (NYSE: TK), Copa Holdings SA (NYSE: CPA), NetApp Inc. (NASDAQ: NTAP), and Meritor Inc. (NASDAQ: MTOR).
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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.