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The Dow Jones today will move on optimism that the worst of the COVID-19 crisis may be over for the American economy.
Cases of COVID-19 are climbing. But the Federal Reserve's low rates and purchasing activity have shown to stimulate markets enough that Chair Jerome Powell may adjust its bond-purchasing plans. More on this below.
Before we get into this story and more, here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
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Now here's a closer look at today's most important market events and stocks. We'll also discuss the stories that slipped under the radar of the mainstream financial press on Wednesday.
The Top Stock Market Stories for Wednesday
- Today, investors are keeping an ear to the latest statement from Federal Reserve Chair Jerome Powell. The Fed Chair told the U.S. Senate on Tuesday that the central bank would adjust its plans to purchase corporate bonds depending on the strength of market conditions. Powell expressed concerns about the timing and strength of the U.S. economic recovery and worries about the health of small businesses around the nation. The head of the U.S. central bank will return to Congress this morning to speak with the House of Representatives on monetary policy and the state of the U.S. economy.
- Johns Hopkins University reports that the number of U.S. coronavirus cases topped 2.13 million on Wednesday morning. The number of deaths could surpass 117,000 today. In the U.S., states like Texas and Arizona are reporting record numbers of hospital cases. However, many officials at the state and local level - and Vice President Mike Pence - have said that the public reaction about a second wave is "overblown."
- Meanwhile, the U.S. housing market is red-hot right now. The number of mortgage applications popped another 4% last week thanks to falling interest rates. This was the ninth straight week of gains in the housing sector for new mortgages. In addition, the market saw the highest volumes in more than 11 years. Analysts tie low interest rates to the surge in activity, which is 21% higher than the same period in 2019.
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Stocks to Watch Today: ORCL, LUV, AMZN
- Shares of Oracle Corp. (NYSE: ORCL) slipped 2.2% after the company announced earnings. The firm reported EPS of $1.20, a figure that topped Wall Street estimates by about five cents. The software giant said that revenue came in lower than Wall Street forecasts, however. The firm said that it has seen a downturn in spending in the retail and hospitality sectors, both key customer segments for the company.
- Southwest Airlines Co. (NYSE: LUV) announced plans to keep flights at two-thirds capacity through Sept. 30. The company said it plans to leave all middle seats empty for the duration of the summer, according to a filing with the U.S. Securities and Exchange Commission. The airline said that its June operations were off between 70% to 75% from a year ago.
- Shares of Amazon.com Inc. (NASDAQ: AMZN) were up again after the stock received a buy rating from Needham. In a stock report, analysts said that the market has undervalued Amazon's media business by as much as $500 billion. Needham says that the collection of Amazon Prime Video, Prime Music, and Twitch are worth almost as much as Amazon's cloud computing division.
- Wednesday will be a busy day for earnings reports. Look for reports from Arconic Corp. (NASDAQ: ARNC), Capri Holdings Ltd. (NASDAQ: CPRI), Abraxas Petroleum Corp. (NASDAQ: AXAS), Global Eagle Entertainment Inc. (NYSE: ENT), Applied Genetic Technologies Corp. (NASDAQ: AGTC), and Korn Ferry (NYSE: KFY).
Why Startups Can Have an Edge During a Recession
Uber, Airbnb, Slack, Pinterest, and Venmo have something big in common - something other than their big names.
These startups were founded during the last recession.
And now, some of the most iconic companies of our time could launch into Fortune 500s during days like today.
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.