Friends
It was an ugly day for stocks. With the chances of a trade deal with China now very slim, at least in the near term, both parties have now switched to imposing greater tariffs as their tool of retaliation. Stock index futures traded sharply lower overnight, and stocks took a dive at the open of trading this morning and never looked back. There were meek attempts by the bulls to take a stand here and there throughout the trading session, but the selling overwhelmed the less than convicted bulls.
By the close, the Dow Jones Industrial Average was down 616 points to finish the day at 25,325. The S&P 500 was down 69 points to close at 2,811. Gold was up $13 to trade at $1,300 per ounce, while oil was down $.83 to trade at $60.83 per barrel WTI.
Now analysts are left with trying to determine the impact of increased tariffs on the individual companies, sectors, and the economy in general. A few names took the brunt of the news that China will be retaliating to the U. S. tariffs, namely Apple, Boeing and Caterpillar. The fact is that China really doesn’t import that much from the U. S. so the damage is somewhat contained, but then there was a rumor that the Chinese would sell our government bonds or at least stop buying more as a form of retaliation. I say bring it on. They would lose some leverage on us if they did not own a good chunk of our debt, and there seems to be plenty of demand for our bonds evidenced by the 10 year Note yield of less than 2.40%. After some impressive gains through April, this is the first real test of 2019 for the bulls. Let’s see if they are up for it.
Have a nice evening everyone.
