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The Dow Jones could soar again today as the U.S. Federal Reserve meets to discuss monetary policy. The central bank has been notably dovish in its handling of the ongoing pandemic.
Concerns are again emerging that the oil futures contract could go negative before expiration. This morning, WTI crude is off 12%, while Brent crude is flat around $20 per barrel. Read on for more detail and other events moving the Dow today.
Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:
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Here are the most important market events and stories I'm following right now.
The Top Stock Market Stories for Tuesday
- Today, the Federal Reserve will kick off its two-day meeting to discuss monetary policy in the wake of the historic coronavirus outbreak. The Fed has taken extraordinary steps to stimulate the U.S. economy, including slashing interest rates to zero and buying junk bonds. The central bank will likely not announce any new plans until it has further information on the state of the American economy. The economy faces levels of unemployment we haven't seen in more than 80 years. And it could mean 18 months to recovery. Some sectors may fail to return to their pre-COVID strengths.
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- Around the globe, nations are feeling the negative impact of the COVID-19 outbreak. Germany has reported a historic low for employment across the country, while Argentina announced plans to stop all international flights into the country through Sept. 1. Johns Hopkins University reported that global cases have now topped 3 million patients, with the United States now on the verge of 1 million official cases. As the United States plans to ease lockdown measures, it's worth monitoring developments in Germany. New figures suggest that German infection rates have increased as the nation moves to ease its lockdown. States including Alaska, Georgia, South Carolina, Tennessee, and Texas have started to reopen their economies.
- Meanwhile, retail stocks are back in focus after a solid double-digit rally on Monday. Investors speculated on the timing of the U.S. economy's reopening. Companies like Kohl's Corp. (NYSE: KSS), PVH Corp. (NYSE: PVH), and Nordstrom Inc. (NYSE: JWN) all rallied Monday and will look to continue their positive momentum on Tuesday.
Stocks to Watch Today: AMZN, PEP, LUV
- Amazon.com Inc. (NASDAQ: AMZN) shares are in focus after a U.S. Senator asked the Department of Justice to investigate the company. Sen. Josh Hawley (R-MO) sent a letter to the Department of Justice suggesting that the firm used "predatory and exclusionary data practices to build and maintain a monopoly." Hawley wants to investigate whether the firm used data from third-party sellers to build its own private label product strategy. "Amazon abuses its position as an online platform and collects detailed data about merchandise so Amazon can create copycat products under an Amazon brand," Hawley wrote.
- PepsiCo Inc. (NYSE: PEP) reported a solid quarterly earnings report in which its adjusted EPS jumped 10% year over year. However, the firm pulled its 2020 outlook as COVID-19 continues to create uncertainty for the firm. The firm reported EPS of $1.07, a figure that beat consensus expectations by $0.04. The company did say that it would continue its buyback and dividend plans for 2020, a decision that goes against the grain on Wall Street as other firms look to shore up cash. PEP stock added 0.8% this morning.
- Southwest Airlines Co. (NYSE: LUV) stock is back near its 52-week low after a dismal earnings report. The company reported its first quarterly loss since 2011 this morning and projected that its May revenue could fall by as much as 95% compared to the same period in 2019. The company appears desperate for cash and announced plans for a public stock offering and up to $1 billion in new debt.
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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.