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The Dow Jones Industrial Average could see big swings this week on the Federal Reserve's efforts to save the American economy.
The U.S. central bank announced a number of new programs to address the systemic challenges faced during the coronavirus pandemic. These programs include another $300 billion in lending for Main Street businesses, plans to purchase mortgage-backed securities, and more Treasury purchases. Details further down.
First, here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:
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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
- The coronavirus continues to spread around the globe at breakneck pace. Global cases topped 343,000 people on Monday with at least 14,790 deaths. In the United States, Johns Hopkins University says that at least 35,224 cases are reported. This morning, Roche announced that broad testing for every American could be weeks if not months away from deployment.
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- The fallout from the coronavirus appears to be extreme. Morgan Stanley (NYSE: MS) has projected that U.S. GDP growth will slump by 30% over the second quarter, which would bring it to its lowest levels in 74 years. This comes a few days after Goldman Sachs projected a 24% decline, and 50% slump projection by the Federal Reserve Bank of St. Louis chair James Bullard. Morgan Stanley does not expect that a depression will arrive in the United States.
- Meanwhile, U.S. oil prices were ticking slightly higher after the Federal Reserve announced plans to provide support for the markets. Prices have been under extreme pressure due to the ongoing spat between Russia and Saudi Arabia. The latter country recently announced it was calling off a deal to cap production. The Saudis will now increase production and aim to capture as much market share as possible. That said, oil remains in low demand with the coronavirus spreading around the globe.
Stocks to Watch Today: BA, RCL, CCL, NCLH, AAPL
- Shares of Boeing Inc. (NYSE: BA) are on the move after the company received an upgrade from Goldman Sachs Group (NYSE: GS). Goldman predicted that Boeing would survive the ongoing threat from coronavirus and that air travel will be as popular as it was once this disease has burned out.
- Amazon.com Inc. (NASDAQ: AMZN) announced plans to increase worker pay at its warehouses around the country. The decision comes a few days after rival Walmart Inc. (NYSE: WMT) announced similar plans. Both companies have ramped up hiring in recent weeks in order to address the surging demand for delivery services as social distancing efforts continue around the United States.
- Marriott International (NYSE: MAR) and Hilton Hotels (NYSE: HLT) are two major hotel operators that are seeking a bailout from the U.S. government. In the meantime, the two firms have put tens of thousands of employees on furlough as the industry deals with the dramatic decline in travel across the world.
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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.