What's moving markets today: March 19, 2019
US stocks closed flat on Tuesday as a solid rally faded on concerns about US-China trade talks.
Markets came under pressure after Bloomberg News reported that some US officials fear China is walking back its trade pledges.
Investors will turn their attention on Wednesday to the conclusion of the Federal Reserve’s two-day meeting and press conference from Fed chief Jerome Powell.
Wall Street is getting whipped around by the latest reports on US-China trade talks.
A rally of nearly 200 points on the Dow nearly vanished on Tuesday after Bloomberg News reported that some US officials fear China is walking back its trade pledges. The Dow nearly turned negative on those headlines.
But stocks quickly rebounded after Dow Jones reported that US officials could travel to Beijing next week and US-China talks are progressing toward their final stages.
The back-and-forth action on Wall Street shows how sensitive investors are to developments in the trade war.
The massive rally in US and China stocks over the past three months has been driven in part by hopes that trade peace will be reached. Any failure to reach a deal could deliver a setback to financial markets.
All three markets are moving higher at midday. Here's a look:
- The Dow is surging 150 points, or 0.60%
- The Nasdaq is climbing 50 points, 0.66%
- The S&P 500 is up a modest 16 points, or 0.56%
Here are some of the day's biggest movers:
- Michael's (MIK), the craft store, is up 14% after posting a better-than-expected earnings report.
- DSW (DSW) shares have recovered slightly: They're now down 12% after falling as much as 15% earlier in the day.
- AMD (AMD) is up 6% ahead of a potential gaming announcement with Google.
- FedEx (FDX) is flat ahead of its eagerly anticipated earnings later.
- DSW (DSW) shares are down 15% after a mixed fourth-quarter earnings report at the discount shoe store:
- What's up: Sales. It was DSW's fifth straight quarter of comparable sales growth.
- What's down: Profits. It posted a surprise larger-than-expected loss, which signaled that the shoe chain had to run promotions to clear out its merchandise during the holidays.
Wall Street is feeling good heading into the Federal Reserve meeting.
The rally comes as the Federal Reserve begins a two-day policy meeting. Fed chief Jerome Powell is expected on Wednesday to stress that the central bank is in no rush to raise interest rates.
We believe the Fed is likely to deliver another dovish message," Bank of America Merrill Lynch strategists wrote in a note to clients on Tuesday.
Canadian cannabis firm Tilray may not be making money just yet. But sales are surging following the legalization of recreational pot in Canada last year.
Tilray (TLRY) said late Monday that revenue soared more than 200% in its latest quarter to $15.5 million. Tilray did report a loss of $31 million though.
But Tilray CEO Brendan Kennedy was upbeat, noting that other big markets could soon open up for the company. “Looking ahead, we remain committed to pursuing global growth opportunities and will be disciplined in deploying capital, particularly in the United States and Europe," he said in the earnings release.
Tilray already has a a deal with Budwesier brewer Anheuser-Busch InBev (BUD) to work on cannabis-based drinks in Canada. It is also a big player in medical cannabis, a business that hasn't been hit by lower prices the way that consumer marijuana has. Tilray has a strategic partnership with Novartis (NVS) subsidiary Sandoz.
Shares of Tilray rose on the news Tuesday while other Canadian cannabis companies that trade in the United States, including Aphria (APHA), Aurora (ACB), Canopy Growth (CGC) and Cronos (CRON), all rallied too.
China is back -- as the biggest risk keeping investors awake at night.
For the first time in nearly two years, the economic slowdown in China tops the list of worries among global investors, according to a survey published on Tuesday by Bank of America Merrill Lynch. Thirty percent of money managers in the survey listed China as the No. 1 "tail risk" that could do damage to their portfolios.
The next biggest fear is China related, too. Trade war, which had led the fear rankings for the past nine months, fell to the No. 2 risk in the survey. But this concern has faded thanks to significant progress in US-China trade talks. After peaking at 60% in July 2018, just 19% of money managers list it as the top concern now.
Others are more worried about the vast amounts of debt Corporate America has racked up over the past decade of easy money. Ten percent of investors surveyed by Bank of America said the top risk is a corporate credit crunch.
The company announced on Tuesday its iMac line is getting a refresh:
- Its new 21.5-inch iMac with a Retina 4K display, due out next week, will come with a 8th-generation quad-core processor, and for the first time 6-core processors.
- Meanwhile, the 27-inch iMac with Retina 5K display features up to 6-core and 8-core processors, offering more than double the performance speeds as its previous model.
Apple says the new devices will be better at handle multi-tasking and graphics performance.
This is the second news announcement from Apple this week. On Monday, Apple quietly announced in a press release new versions of the iPad Air and iPad mini, the company's first refresh for those products in years.
Apple typically creates fanfare around the arrival of new hardware, but its focus at its upcoming spring event this year will be on its rumored streaming service.
Apple wants to get the iPad out of the way so it can hold its first event truly focused on streaming," Lauren Guenveur, senior research analyst at IDC, told CNN Business at the time. "If Apple announced new Pads, it would turn into a hardware event, and that's not what it wants."
Perhaps Apple feels the same way about the new iMacs.
The 21.5-inch iMac will start at $1,299 and the 27-inch iMac with will start at $1,799.
JPMorgan Chase (JPM) CEO Jamie Dimon is not a fan of tariffs, but he concedes that President Donald Trump's love of them might be paying off.
"As a negotiating strategy, it might've worked," Dimon told CNN's Poppy Harlow.
The comments are in stark contrast with at least one Trump adviser. Former White House economist Gary Cohn, who was once second in command at Goldman Sachs, flatly said last week that "tariffs don't work."
Dimon said he agrees with Cohn that tariffs "don't work technically" because they cause negative side effects, namely rising costs for consumers and businesses.
"But if the president were here, he'd say, 'They worked. I got them to the table and no one else did,'" Dimon told CNN.