The Market Bull – May 17, 2019
Rumors of a trade war settlement helped the major averages to large gains early in the week, only to see hope dashed in the final hour. As the major averages closed with modest losses for the day. Since Monday the Standard and Poors 500 Index is up 20 points or .7 percent, while the NASDAQ gained 96 points or 1.2 percent.
The first quarter services survey showed continued broad declines for all sectors except hospitals. On a year ago basis the series is up 6.3%, but this is a 4-quarter low. A large decline was seen for motion picture and sound recording industries as growth plunged from 6.4% to just .9%. Legal services almost doubled from 4.4% to 8.6% over the same period.
While the lamestream media continues to act like trade wars are no big deal. Data on world trade shows that in fact trade wars and tariffs are a very big deal and are about to become a much bigger deal as tariffs jump from 10% to 25% and are broadened to include virtually all Chinese imports. Data from the CPB Netherlands Bureau for Economic Policy Analysis revealed that world trade volume dropped 1.8% in the three months to January compared to the preceding three months as a synchronized global downturn gained momentum.
Based on a piece published by the Telegraph that went on to describe the sudden loss in trade momentum as equivalent to the months after the dot com bubble imploded in 2000 when trade volumes sank as much as 2.2%. The current move is the biggest fall since the financial crisis of 2007–2008 when global trade plummeted, diving as much as 12.7%.
Standard and Poors 500 Index closed at: 2,859.53 down 16.79
NASDAQ finished the day: 7,816.28 down 81.76
Gold ended trading at: $1,278.10 down $8.10