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The Dow Jones Industrial Average will claw back from Friday's massive sell-off today. The Dow shed more than 600 points Friday as concerns about the spread of coronavirus dominated headlines.
Travel, airline, and casino stocks are facing new pressure due to the novel coronavirus and related restrictions around the globe. Volatility remains high for investors. During the month of January, the VIX increased from 13 at the start of the month to 18. More on this below.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
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
- Momentum signals are still negative as the world experiences the grip of fear over the novel coronavirus. China's National Health Commission said Monday that the nation has experienced 361 deaths due to the virus. It also has confirmed 17,205 cases across the country. Economists are concerned that the ongoing spread of the disease will weaken the world's second-largest economy and drive growth downward to about 5% in the first quarter. That weakness could have a profound impact on a number of leading U.S. companies like Nike Inc. (NYSE: NKE), Boeing Co. (NYSE: BA), General Electric Co. (NYSE: GE), and Caterpillar Inc. (NYSE: CAT), which have extensive ties to the Chinese economy.
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- Oil prices continue to slump as hedge funds and short sellers pile on over concerns about global economic growth and the coronavirus. Oil prices fell by 17% in January, and there appears to be growing pessimism that WTI crude could fall under $50 in the weeks ahead. The downturn has been so sudden and sharp that OPEC, the world's largest oil cartel, is again considering cuts to its production. OPEC could slash output by another 500,000 barrels per day, according to Reuters. Meanwhile, falling U.S. prices will likely lead to the suspension of operations in many shale fields.
- Today is the Iowa Caucus, the first primary of the 2020 election season. The markets are on eggshells right now as it remains uncertain which candidate will walk away with the first prize of the Democratic primary process. Bernie Sanders (I-VT) led the polls heading into today's competition. However, reports indicate that mainstream Democrats are increasingly concerned that Sanders could weaken their ability to beat U.S. President Donald Trump in the 2020 election.
Stocks to Watch Today: AAPL, GOOGL, LVS, WYNN
- Shares of Apple Inc. (NASDAQ: AAPL) continue to face pressure due to the novel coronavirus. One of the top Apple stock analysts slashed its iPhone shipment forecast by 10% due to the ongoing crisis in mainland China. Apple has already suspended production operations across the country. The downward revision comes a week after Apple announced record sales for its products.
- Alphabet Inc. (NASDAQ: GOOGL) will report earnings after the bell on Monday. The pace of earnings will pick up over the next two weeks, and Google is an important bellwether stock for the rest of the tech sector. Investors are interested in hearing the numbers given that this is the first earnings report since its founders, Sergey Brin and Larry Page, announced plans to step back from day-to-day operations.
- Finally, the novel coronavirus is weighing down casino stocks. This morning, China announced that gambling revenue in the popular Chinese region of Macau fell by 11.3% due to the viral spread. This news is weighing down shares of Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts Ltd. (NASDAQ: WYNN) this morning.
- Look for earnings reports from Watts Water Technologies Inc. (NYSE: WTS), Diamond Offshore Drilling Inc. (NYSE: DO), RingCentral Inc. (NYSE: RNG), Mimecast Ltd. (NASDAQ: MIME), Molina Healthcare Inc. (NYSE: MOH), and Rapid7 Inc. (NYSE: RPD).
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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.