The Market Bull – May 6, 2019
The major averages opened with large losses following an overnight Trump tantrum that threatened to dramatically escalate the Chinese trade war.
Trumps overnight threat to take the trade war with the Chinese to the next level with 25% tariffs and a dramatic expansion of tariffed items to include almost everything the Chinese export to the US, spooked the major averages to very large opening losses. The latest round of blustering by the Trumpinator led the Chinese delegation to threaten to suspend the next round of talks due to start this week. Once again Trump’s rhetoric is long on bluster and short on facts, to wit. The tariff’s are responsible for the great economy, nothing could be further from the truth. Trade war and tariff costs are borne by China, a half-truth at best, yes the Chinese pay the tariffs, Americans end up paying higher costs for imported Chinese goods, unless they can source an alternative from another country. Trade wars are easy to win, and debts don’t matter are going to turn out to be some of the biggest lies of the new millennium.
The 2nd quarter 2019 Senior Loan Officer Survey is out showing broadly weakening demand as lending standards continue to tighten, trends that have been going on for months now despite falling interest rates of late. The one exception being Commercial and Industrial lending that has seen easing standards for a number of month’s now, while demand has fallen sharply, especially for construction and development loans.
Standard and Poors 500 Index closed at: 2,932.47 down 13.17
NASDAQ finished the day: 8,123.29 down 40.71
Gold ended trading at: $1,281.40 up $.10