The Dow Jones Industrial Average is tied to investor uncertainty over the COVID-19 coronavirus today. While the Dow regained some of last week's losses this morning, investors continue to flock to safe-haven assets.
The Japanese yen has continued an impressive run against the U.S. dollar while the U.S. 10-year Treasury yield fell to a record low of 1.07%. There has been chatter of central bank activity in response to the viral panic. This could have an impact on yields in the weeks ahead. More on what to expect below.
Here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
Index
Previous Close
Point Change
Percentage Change
Dow Jones
25,409.36
-357.28
-1.39
S&P 500
2,954.22
-24.54
-0.82
Nasdaq
8,567.37
+0.89
+0.01
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
This morning, the European Central Bank announced it was prepared to provide support to the continental trade bloc should conditions on the ground worsen due to the coronavirus. The ECB released a statement saying, "the Governing Council stands ready to adjust all its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner."
In China, the Markit/Caixin manufacturing Purchasing Managers' Index slumped to 40.3, well below the forecast of 45.7 in a Reuters poll. Meanwhile, the official Purchasing Managers' Index slumped to a record low of 35.7 in February. Anything under 50 signals a contraction in the sector. Despite this news, both the Shanghai Composite and the Shenzhen component gained more than 3.1% overnight. Japanese and South Korean markets recovered slightly this morning.
Will the U.S. Federal Reserve also cut interest rates? Goldman Sachs Group Inc. (NYSE: GS) predicted that the central bank will slash rates in March by 0.5%, a significant cut for the Fed. In addition, the Wall Street bank projects that the Fed will introduce another cut of 0.5% at some point this year (for a total of 1%). Federal Reserve Chair Jerome Powell hinted on Friday that the U.S. central bank was ready to step in and provide support to the U.S. economy should weakness persist.
Money Morning Insight of the Day
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Stocks to Watch Today: TWTR, GE, GS, AAPL
Activist hedge fund Elliott Management has built a large stake in Twitter Inc. (NYSE: TWTR). Now Paul Singer's hedge fund has one objective: to remove Jack Dorsey as the CEO of the company. The activist hedge fund has also appointed four individuals to Twitter's board.
Goldman Sachs Group Inc. (NYSE: GS) is the latest American business titan to suspend all non-essential international employee travel due to coronavirus fears. The company released a memo this morning suggesting that employees take "precautionary measures" to address the ongoing spread of the virus.
Former General Electric Co. (NYSE: GE) chair and CEO Jack Welch has passed away at the age of 84. Welch is considered by the business community to be one of the greatest CEOs in the history of American corporate leadership. In the 20 years that he led GE, he helped boost the company's market capitalization from $12 billion to more than $410 billion. Fortune magazine once called him the "manager of the century."
Shares of Apple Inc. (NASDAQ: AAPL) are in focus after the stock received an upgrade from Oppenheimer. Apple stock has been in a free fall due to its exposure to the coronavirus and its impact on the company's supply chain. That said, Oppenheimer analysts said that they believe Apple's products will "prove more resilient than competitive products in uncertain times."
Look for an earnings report from Tilray Inc. (NASDAQ: TLRY), JD.com Inc. (NASDAQ: JD), Omeros Corp. (NASDAQ: OMER), Boingo Wireless Inc. (NASDAQ: WIFI), and GTT Communications Inc. (NYSE: GTT).
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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.