Category Archives: Indexes

Threat Of Mexican Tariffs Spook Stocks

FRIDAY – Stock index futures tanked on Friday morning, as investors feared President Donald Trump’s surprise threat of tariffs on all Mexico imports, amid a worsening trade war with China, could risk sending the U.S. economy into a recession.

Around 8:25 a.m. ET, Dow Jones Industrial Average futures indicated a drop of 270 points at the open. Futures on the S&P 500 and Nasdaq dropped by more than 1% each. The S&P 500 was already down 5.3% this month through Thursday after trade talks fell apart with China and rhetoric on both sides worsened in May.

The closely watched 10-year Treasury yield dropped to lows not seen since 2017. The U.S. benchmark was yielding 2.17% Friday morning. It was above 2.5% at the beginning of the month. Mexico’s currency, the peso, tanked against the dollar by more than 2% to trade at 19.6 per dollar.

On Thursday evening, Trump announced the U.S. would impose a 5% tariff on all Mexican imports from June 10 until illegal immigration across the southern border was stopped.

The trade war appears to be dragging down the Chinese economy. The country’s manufacturing activity contracted more than expected in the month of May, China government data out overnight showed. The official manufacturing Purchasing Managers’ Index (PMI) for May was 49.4, down from April’s reading of 50.1. PMI readings below 50 signal contraction.

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Trade Tensions Spook Stocks

MONDAY – A sharp sell-off will start the week on Wall Street after President Donald Trump said on Sunday that the U.S. will hike tariffs on goods imported from China, casting doubt on recent optimism that the world’s two largest economies were close to a resolution to their trade battle.

Dow Jones Industrial Average futures dropped 457 points as of 8:32 a.m. ET which implied an opening decline of about 440 points. S&P 500 futures lost 1.5% and Nasdaq-100 Index futures dropped 1.9%.

China’s stock markets, meanwhile, fell sharply. The Shanghai Composite dropped 5.6% while the Shenzhen A Shares index plunged more than 7%.

Trump said in a tweet Sunday afternoon that the current 10% levies on $200 billion worth of Chinese goods will rise to 25% on Friday. He also threatened to impose 25% tariffs on an additional $325 billion of Chinese goods “shortly.”

The S&P 500, up 17.5% in 2019 alone, notched a record close on Tuesday. The tech-heavy Nasdaq Composite, which has soared more than 20% this year, clinched a record close on Friday. The S&P 500 is set to drop 1.5% on Monday, which would be its biggest one-day decline since March 22, when it dropped 1.9%.

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Mood turns cautious ahead of earnings season


MONDAY – U.S. stocks were lower Monday, with the market perhaps worried about what is likely to be a tougher earnings season.

At around 8:35 a.m. ET, Dow Jones Industrial Average futures indicated a negative open of more than 100 points. Futures on the S&P 500 and Nasdaq 100 were both marginally lower.

Market focus is largely attuned to corporate results, with major U.S. banks set to get the ball rolling later in the week.

Analysts have warned that the upcoming earnings season could be the first quarter of contracting corporate results since 2016.

J.P. Morgan Chase and Wells Fargo are both set to report their latest figures on Friday.

Before that, minutes from the Federal Reserve’s last meeting are due to be released on Wednesday.

Following the Fed’s most recent meeting in March, the central bank decided to maintain interest rates and hold off on any further increases this year.

On the data front, factory orders for February will be published at around 10 a.m. ET.

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Stocks Rise For Second Week

SUNDAY – Stocks posted their second weekly rise on Friday as stocks were boosted by better-than-expected jobs data and progress on the U.S.-China trade front.

The S&P 500 and Dow Jones Industrial Average both rose about 2% this week, while the Nasdaq Composite jumped 2.7%. On Friday, the S&P 500 and Nasdaq closed up by 0.5% and 0.6%, respectively.

Materials and financials were the best-performing sectors this week, rising 4.3% and 3.3%, respectively. Bank shares led the gains in financials. Morgan Stanley rose more than 6% this week, while Goldman Sachs, Bank of America and Citigroup all ended the week up more than 5%.

The U.S. economy added 196,000 jobs in March, according to data released on Friday by the Bureau of Labor Statistics. Economists polled by Dow Jones expected 175,000. The U.S. unemployment rate, meanwhile, remained at 3.8%. However, wage growth expanded 3.2% just below an expected gain of 3.4%.

Wall Street was looking forward to this report after the previous jobs data showed growth of just 20,000. That number was revised higher to 33,000 on Friday.

Friday’s strong jobs report comes after the release of disappointing economic data earlier in the week. Activity in the U.S. services sector fell to its lowest level since August 2017 while payrolls data released on Wednesday was also below expectations.

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Stocks Start Lower On Economic Concerns

THURSDAY – U.S. stock index futures fell on Thursday morning as investors digested the Federal Reserve’s latest announcement on monetary policy as well as a sharp drop in Biogen shares.

At 7:48 a.m. ET, Dow Jones Industrial Average futures indicated a decline of 136 points at the open. Futures on the S&P 500 and Nasdaq 100 also fell.

The Dow closed lower on Wednesday after the Fed announced a more dovish policy. Jerome Powell, the Fed’s chair, said the central bank is forecasting no rate hikes in 2019, which is down from two hikes forecast earlier. U.S. Treasury yields fell on the news, which added pressure on certain stocks, including banks.

Rising rates are good for banks since they are able to lend out money to investors at a profitable rate of interest. Lower interest rates restrict the bank’s ability to make profits thus adding pressure on margins.

The central bank also lowered its growth outlook for the year and indicated it would end its balance-sheet reduction process by the end of September.

U.S.-China trade is also in focus for investors after mixed comments from the White House. President Donald Trump said Wednesday that Washington’s tariffs on Beijing could stay on for a “substantial period of time.”

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Stocks Wobble As Traders Await Fed

WEDNESDAY – U.S. stock indexes barely moved on Wednesday as shares of FedEx fell while investors awaited a policy decision by the Federal Reserve.

At 10:00 a.m. ET, Dow Jones Industrial Average was down just about 100 points. S&P 500 and Nasdaq 100 were also little changed.

Concerns over global growth and U.S.-China trade talks were also renewed to keep stock gains subdued.

Bloomberg News reported some U.S. officials are worried China could walk back on some concessions. However, The Wall Street Journal said U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin both plan to travel to Beijing next week for another round of negotiations with Chinese Vice Premier Liu He. These reports buffeted stocks on Tuesday.

The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods over the past year, battering financial markets and souring business and consumer sentiment.

In Asia, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, dipped 0.4 percent.

No economic data are expected on Wednesday, however, on the earnings front, General Mills is set to report its results before the bell and Williams-Sonoma will report after the bell.

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Stocks Lower After Low Jobs Numbers Stoke Slowdown Fears

FRIDAY – Stocks fell on Friday after the U.S. government released employment data that badly missed expectations, adding to growing concerns that the global economy may be slowing down.

The Dow Jones Industrial Average pulled back 215 points as Caterpillar and Chevron lagged. The S&P 500 fell 0.8 percent as the energy and tech sectors both dropped more than 1 percent. The Nasdaq Composite slid 1.1 percent.

The U.S. economy added just 20,000 jobs in last month, marking the weakest month of jobs creation since September 2017. Economists polled by Dow Jones expected a gain of 180,000.

Treasury yields fell along with futures. The benchmark 10-year rate dipped to 2.619 percent while the 2-year yield traded at 2.45 percent.

Equities were on track to post rare weekly losses. The major indexes were all down more than 1.9 percent entering Friday’s session. The Nasdaq was on pace to snap a 10-week winning streak, while the Dow was set to notch its second weekly decline of the year.

The weekly decline comes amid growing fears that most of the positive news on the U.S.-China trade front may be baked in. At this point, most investors expect the two countries to strike a trade deal later this month. There are also worries that a deal may not be sure thing.

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Stocks turn lower, heads for 4-day slide after ECB cuts growth forecast

THURSDAY – Stocks fell on Thursday after the European Central Bank slashed its economic growth forecast for 2019 and announced a new round of stimulus to help banks in the region, stoking worries over the global economy.

The Dow Jones Industrial Average traded 246 points lower as shares of 3M and United Technologies lagged. The S&P 500 fell 0.7 percent, led by declines in the industrials and materials sectors. The Nasdaq Composite dropped 0.8 percent. The indexes were headed for their fourth consecutive loss.

Both the Nasdaq and S&P 500 also broke below their 200-day moving averages, levels that are closely watched by traders.

ECB President Mario Draghi said the central bank cut its growth estimate to 1.1 percent, down from a 1.7 percent expansion forecast released in December.

Thursday’s moves come after the major indexes posted their third straight day of losses, with investors eager to know details from trade negotiations between the U.S. and China.

Stocks are still up sharply for the year despite Thursday’s losses. The S&P 500 and Nasdaq have both risen more than 10 percent while the Dow is up more than 9 percent.

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Stock turn positive as ECB announces new funding

THURSDAY – U.S. stock index futures erased earlier losses on Thursday after the European Central Bank announced a new round of stimulus to help banks in the region.

At 8:10 a.m. ET, Dow Jones Industrial Average futures were up 23 points after slipping nearly 100 points. S&P 500 and Nasdaq 100 futures were also up slightly.

The ECB said its new targeted longer-term refinancing operations (TLTRO-III) stimulus program will start in September and run through March 2021. TLTROs are loans provided by the ECB to European banks at a low rate, making it easier for them to lend money to consumers, which in turn can help stimulate the economy. This is the third stimulus injection from the ECB since 2014.

Wall Street ended Wednesday’s session lower, posting its third consecutive decline. Investors are eager to know details from trade negotiations between the U.S. and China.

As trade talks between the world’s largest economies continue, there’s fresh tensions regarding Huawei. The Chinese firm filled a lawsuit against the U.S. government, claiming the law which bans it from selling equipment to government agencies is unconstitutional.

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Stocks Lower Wednesday While Waiting For Trade News

WEDNESDAY – Stocks fell on Wednesday as investors sought further indications that a trade deal between China and the U.S. could be reached in the near future.

The Dow Jones Industrial Average pulled back 75 points as Exxon Mobile and Walgreens Boots Alliance lagged. The S&P 500 dipped 0.4 percent, led by declines in energy and health care. The Nasdaq Composite declined 0.5 percent.

Stocks are off to a hot start this year, with the S&P 500 rising more than 11 percent through Tuesday’s close. Increasing expectations that a trade deal will get done have partly helped equities surge in 2019.

However, there is growing fear that an agreement may be fully priced in, possibly limiting any more gains from positive trade news.

Recently, the S&P 500 has had trouble making a significant break above 2,800, a key level being watched by investors. The broad index closed above that level on Friday, but fell back below it this week.

Meanwhile, the U.S. trade deficit increased to a 10-year high of $59.8 billion despite the administration’s efforts to reduce the number. Economists surveyed by Refinitiv expected the number to increase to $57.3 billion.

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