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The Dow Jones Industrial Average will react to a Group of Seven meeting today where industrial powers discuss the economic impact of the coronavirus. But despite global efforts to control the virus, investors fear moment-to-moment swings in the Dow today.
The G-7 talk is not expected to include any calls for central bank coordination or new government programs. However, some countries have already moved on monetary policy. Australia, for example, cut its benchmark interest rate and cited a "significant effect" of coronavirus on the national economy. More on this story below.
First, here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
|Index||Previous Close||Point Change||Percentage Change|
Here are the most important market events and stories that I'm following right now.
The Top Stock Market Stories for Tuesday
- Futures traders now anticipate aggressive action by the U.S. Federal Reserve on interest rates within the next 45 days. According to CME Fed Watch, the market has already priced in a rate cut of 75 basis points by the time of the central bank's April meeting. Even more stunning, the probability that interest rates will fall into a range of 0% and 0.25% by December 2020 sits above 5%. The market has priced in the possibility that we will be sitting on the cusp of negative nominal interest rates by the end of the year.
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- This morning, markets continue their rebound from last week's brutal sell-off. However, this appears to be a "technical" bounce back driven heavily by futures trading. It's clear from the data that not many believe last week to be the last of the sell-off. Markets anticipate an aggressive response to the coronavirus by central banks around the globe. U.S. President Donald Trump has reportedly asked the Fed for a large cut in the wake of Australia's 25-basis-point cut on Tuesday.
- Oil prices gained more than 2% this morning as investors continue to monitor the coronavirus and the sentiment ahead of OPEC's meeting to discuss potential production cuts. Reports indicate that OPEC might move to cut an additional 1 million barrels per day in production. That figure would be much higher than the proposed plan to slash 600,000 barrels per day. OPEC will kick off its two-day meeting on Thursday.
Stocks to Watch Today: WIFI, TGT, TMO, QGEN
- Shares of Target Corp. (NYSE: TGT) were off roughly 2% after the company reported mixed fourth-quarter earnings on Tuesday morning. The company reported weaker sales in its home goods, toys, and electronics categories. The firm has also canceled its in-person investor event in Manhattan due to the spread of coronavirus.
- Shares of Boingo Wireless Inc. (NASDAQ: WIFI) popped more than 15% in pre-market hours after the company announced it is exploring a deal to sell to another company.
- Shares of Qiagen NV (NYSE: QGEN) popped more than 16.1% on news that the company will be sold to Thermo Fisher Scientific Inc. (NYSE: TMO). The $10 billion deal represents the largest in 2020 for the healthcare sector. Qiagen is a producer of tests for diseases that include cancer and the new coronavirus.
- Look for earnings reports today from Veeva Systems Inc. (NASDAQ: VEEV), Ambarella Inc. (NASDAQ: AMBA), Yext Inc. (NASDAQ: YEXT), Nordstrom Inc. (NYSE: JWN), and Ross Stores Inc. (NASDAQ: ROST).
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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.