US Stocks Decline for a 2nd Day Running, EU Tariffs Loom


Wednesday’s US economic data included the ADP Employment Change report for September and the weekly MBA Mortgage Applications Index.

The takeaways are as follows:

  • Private-sector payrolls were estimated to have increased by 135,000 in September (consensus 150-K) while the prior month’s print was revised down to 157-K from 195,000. Private-sector job growth averaged 145-K in Q-3 or this past Q, according to ADP, Vs 214-K in the Q-3 of Y 2018.
    • Today’s report is unlikely to sway expectations for Friday’s NFPs (Consensus 150,000), as the market is expecting modest growth

The United States won approval Wednesday to impose import tariffs on $7.5-B worth of European goods over illegal EU subsidies handed to Airbus (OTCMKT:EADSY), threatening to trigger a tit-for-tat transatlantic trade war as the global economy falters

The move, culminating a 15-yr standoff, gives the Trump administration the legal cover to impose tariffs it has long threatened, escalating uncertainty for the economy at a time when the US trade dispute with China is weighing heavily on businesses, particularly manufacturers.

DJIA -494.42 to 26078.62, NAS Comp  -123.44 to 7785.25, S&P 500 -52.64 at 2887.65

The S&P 500 fell 1.8% Wednesday, as growth concerns continued to force investors to reassess earnings prospects and premium valuations. The DJIA lost 1.9%, the NAS Comp lost 1.6%, and the Russell 2000 lost 0.9%. 

WTI Crude Oil lost 1.8%, or $0.90, to $52.64 bbl to extend its recent decline amid bearish inventory data and growth concerns. These growth concerns also contributed to another advance in Treasuries, driving yields lower across the curve. The 2-yr yield declined 8 bpt to 1.48%, and the 10-yr yield declined 5 bpts to 1.60%, .DXY declined 0.1% to 99.02.

  • NAS Comp+17.3% YTD
  • S&P 500 +15.2% YTD
  • DJIA +11.8% YTD
  • Russell 2000 +9.7% YTD

HeffX-LTN’s overall technical for the US major stock market indexes is Neutral to Bullish in here.

Stay tuned…