The Market Bull – August 1, 2019
The major averages closed with large losses on disappointing news and another trade war escalation as Trump threatens more and larger tariffs again.
Construction Spending missed expectations in June falling 1.3%, a 2nd consecutive decline for the series that has struggled in the last 12-months. All categories declined. Public construction fell particularly hard down 3.7%. On a year ago basis construction spending was 2.1% below its June 2018 level.
The Institute for Supply Management Manufacturing Index slipped .5 in July to 51.2 on weakness in production, inventories and trade related components. Price data was negative for a second month.
With the latest round of trade talks with the Chinese ending in failure, Trump once again threatens to escalate the imposition of tariffs. With neither side able to reach agreement it would seem that a tit for tat escalation is on the cards. Trouble is that despite numerous mainstream media assurances that the trade war and tariffs are no big deal. The incoming data strongly suggests otherwise. I have often thought that this is why Trump has backed off on a sharp escalation of the trade war repeatedly, because he knows that the economy will hit the skids if he does, not just in the US, but also China as well, and by implication the world.
Standard and Poors 500 Index closed at: 2,953.56 down 26.76
NASDAQ finished the day: 8,111.12 down 79.44
Gold ended trading at: $1,443.90 up $39.30