The Market Bull – May 24, 2019
The major averages closed the week with small gains despite disappointing economic data and an unstable geopolitical backdrop. Since Monday the Standard and Poors 500 Index is down 16 points or .6% while the NASDAQ has lost 77 points or 1%.
Durable Goods Orders fell 2.1% in April, on broad based weakness. The proxy for business spending non-defense capital goods ex aircraft fell 5%, a second large decline in the last 3-months. A volatile series it has shown little growth for over a year now, and I doubt a full-blown trade war will help any.
With defaults and delinquencies on the rise for credit cards, heavily indebted American Consumers are struggling to make their car payments as well. The excessive debt levels are also starting to put a real crimp in new car sales pushing inventories up to the point that manufacturers are starting to cut production per a research piece by Merrill Lynch. The report went on to note that auto production fell 2.5% in April, a second decline in the last 3-months. These production declines are expected to shave .2% from Gross Domestic Product or GDP, while reducing employment as well. The next few months will be very telling as the effects of the trade war become known. Given that the economic data was already softening and that 2nd quarter GDP estimates are struggling to stay above 2%, risks to the downside are growing.
Standard and Poors 500 Index closed at: 2,826.06 up 3.82
NASDAQ finished the day: 7,637.01 up 8.73
Gold ended trading at: $1,284.30 down $1.10
Disappointing data and the realization that the trade war will hit the economy hard sent the major averages into the close with large losses.read more
The major averages closed with small losses on little real news though the Federal Open Market Committee minutes were subject to their usual dissection.read more
Despite some fairly significant and disappointing economic data along with a dramatic escalation of the trade war after China threatened to cut off rare earth exportsread more
The major averages stumbled to begin the week on disappointing data. Rumors of a trade war settlement evaporated once again.read more
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.read more
Despite considerable geo-political uncertainty, mixed economic data and still no resolution to the trade war in sight, the major averages closed with large gains.read more
Despite mixed economic data the major averages closed with large gains as the rumored trade war settlement melt up continues.read more
Despite a lack of real news, the major averages managed to recover all of yesterday’s losses and then some on yet another rumored trade war settlement.read more
The major averages kick off the week with very large losses after the dramatic escalation in the trade war with tariffs hitting 25% and including all Chinese goods.read more
25% tariffs sent the major averages to large losses in early trade, but Trump stopped short of applying tariffs to almost all Chinese imports.read more