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

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

$DIA, $SPY, $QQQ, $RUTX, $ESDAY, $VXX

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…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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