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The Dow Jones now faces resistance after the International Monetary Fund (IMF) reported banks across the world would struggle to be profitable due to COVID-19. More on this below.
Markets are digesting the latest round of earnings reports. China party leaders kick off the annual National People's Congress. Let's talk about everything moving the Dow today…
First, here are the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
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Now let's take a look at what I consider to be the most important market events to start your day.
The Top Stock Market Stories for Friday
- Investors are concerned that the U.S. jobs market could be even worse than expected. On Thursday, U.S. President Donald Trump said he will not push to close the United States should we experience a second wave. Right now, the U.S. death toll from COVID-19 is approaching 100,000. More than 1.57 million people have been infected. The number is approaching six figures at a time that the most impacted states like New York and New Jersey start to reopen beaches ahead of Memorial Day weekend.
- The International Monetary Fund issued a dire warning on the state of the global banking system through 2025. In a report issued this morning, the IMF said that banks across the top nine economies will struggle to be profitable due to COVID-19 and the extended period of low interest rates. The IMF expects tighter margins and the threat of defaults. The banking industry has taken a number of hits over the last month. The KBW Bank Index – which tracks roughly 25 banks in the United States – plunged nearly 40% since January.
- Today, China announced that it will not set a target for GDP in 2020. The nation made the decision to forgo any estimates due to the outbreak and impact of coronavirus. The announcement came at China's annual parliamentary meeting, which had been delayed by two months due to the outbreak. In 2019, China's GDP expanded at a pace of 6.1%, falling on the low side of the country's range. Its economy contracted by 6.8% during the first quarter. China will conduct the opening ceremony of the National People's Congress, which will precede speeches and outlines of government policies such as the defense budget, debt priorities, and a focus on the nation's ballooning debt.
The FCC's Recent $10 Billion Initiative Is Going to a Single Technology
The White House has put a new Internet technology on the fast track.
But what the public hasn't caught onto yet is that this $10 billion initiative has just opened up a new opportunity to invest – in the Internet itself.
And folks who strike while the iron's hot stand to lock in an unprecedented windfall.
Stocks to Watch Today: AZN, DE, FL
- AstraZeneca Plc. (NYSE: AZN) and Oxford University are moving forward with a vaccine trial. The partnership aims to recruit more than 10,000 adults and children for the next phase of its trials. The drug company received $1.2 billion from the U.S. Biomedical Advanced Research and Development Authority to accelerate its trial efforts. The university is currently looking for candidates for its phase 2 trial, which will center around immune responses in various ages and demographics. The phase 3 trial will access the vaccine's actual defense response against COVID-19.
- Shares of Deere & Co. (NYSE: DE) popped 3% after the agricultural manufacturing giant reported solid earnings this morning. The firm reports Q2 earnings of $2.11, easily beating expectations of $1.62. The firm also beat revenue expectations. That said, COVID-19 is weighing on the company's expectations moving forward. The company projects that global equipment sales will fall by up to 40% due to waning demand.
- Shares of Foot Locker Inc. (NYSE: FL) fell by 6.8% after the company fell short of revenue expectations before the bell. The company reported a loss of $0.67 per share during the first quarter. That figure was much larger than the expected loss of $0.25 that analysts had expected before the report. The company said it fell short of revenue expectations and said that same-store sales were off nearly 43%. The company has also suspended its dividend for the time.
5G Was Following in the Footsteps of 4G Until the FCC Stepped In
By now, you've heard the 5G story a million times over. You've seen the billboards, you've seen the commercials, and you've seen the hype campaigns.
But there's a key reason why there hasn't been a nationwide rollout yet.
It was following in the footsteps of the 10 years it took 4G to roll out… but the FCC just stepped in with a $10 billion initiative to supercharge 5G.
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.