World Markets Fell This Week, Investors Fear Trade Wars
$DIA, $SPY, $QQQ, $VXX
The world’s stock markets fell Friday on investor fears that a trade conflict between the US and China might would escalate.
A 3nd day of losses pushed US stocks to their worst week in 2 years.
So far, China’s response to the tariffs President Donald Trump announced this week was muted saying it would defend itself.
The Chinese government said it might place tariffs on a $3-B list of U.S. goods such as pork, apples and steel pipes, a response to the tariffs on steel and aluminum imports that President Trump announced earlier this month.
|Strong: Energy, Industrials, Consumer Staples, Utilities, Telecom|
|Weak: Financials, Technology|
Tech companies after having made huge gains over the last year are getting hammered, since they do so much business outside the US, investors see them as vulnerable to the effects of a trade dispute.
There will likely be a bounce as the markets are oversold, and the sides start to negotiate. There could be further decline if investors get a sense there could be more trade restrictions coming and bank profits and move to the sidelines and wait for buying opportunities.
Financial institutions took losses as interest rates declined. Rates climbed earlier this week after the Fed raised rates 1/4 pt, but then fell after the tariffs were proposed. If the tariffs and counter-tariffs reduce economic growth in the US, the Fed is likely to turn very Dovish, and raise rates at a slower pace.
Savvy analysts now see areas in the market with the greatest potential for earnings improvement this year are small and mid-cap stocks, as they that have the biggest benefit from tax reform and are less subject to trade issues.
Friday, the major US stock market indexes finished at: DJIA -424.69 at 23533.20, NAS Comp -174.01 at 6992.66, S&P 500 -55.43 at 2588.26
Volume: Trade on the NYSE came in at: 990-M/shares exchanged.
- NAS Comp +1.3% YTD
- S&P 500 -3.2% YTD
- DJIA -4.8% YTD
- Russell 2000 -1.7% YTD
HeffX-LTN’s Market Indexes Technical Analysis
Have a terrific weekend.