Market Updates

Market Update – May 13, 2019

Posted on May 13, 2019 by RCM Investments

The Week on Wall Street

As we noted recently, Wall Street has a wandering eye. Last week, it focused on the new tariff threats in the ongoing U.S.-China trade dispute. Stocks fell across five trading sessions: the Dow Jones Industrial Average lost 2.12%, the S&P 500, 2.18%; the Nasdaq Composite, 3.03%. International stocks also fell: the MSCI EAFE index declined 3.06%.

Earnings and big-name initial public offerings mattered little last week. Traders were more concerned about how consumers and corporations might be affected by higher import taxes in future quarters.[i],[ii]

Tariffs Increase

At 12:01 a.m. Friday, duties on $200 billion worth of Chinese products coming to the U.S. rose from 10% to 25%. Just days earlier, President Trump had tweeted that the U.S. might also tax another $325 billion of Chinese imports, mainly consumer goods.

While the proposed new taxes might take months to implement, institutional investors reacted negatively to this information, perceiving that trade talks were stalled.[iii],[iv]

Final Thought

A few weeks ago, market watchers noted the huge number of initial public offerings anticipated for 2019. One well-known tech firm completed its IPO on Friday, and the wave of tech IPOs is still building. According to research firm CB Insights, the average stock market valuation of the venture-capital-backed tech companies going public this year is $9.6 billion.[v]

  THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: April retail sales figures from the Census Bureau.

Friday: The University of Michigan’s preliminary May consumer sentiment index, a measure of consumer confidence.

RCM Investments is a branch office of DFPG Investments, Inc.  Securities offered through DFPG Investments, Inc., member FINRA/SIPC.  Investment Advisory Services offered through RCM Investments, a SEC-Registered Investment Advisor.  DFPG and RCM Investments are not affiliated.

Past performance of investments is no indication of future results.

[i] https://www.wsj.com/market-data

[ii] https://quotes.wsj.com/index/XX/990300/historical-prices

[iii] https://www.cnn.com/2019/05/10/business/china-us-tariffs-trade/index.html

[iv] https://www.cnbc.com/2019/05/07/if-trump-slaps-china-with-all-the-tariffs-threatened-it-could-be-the-us-consumer-that-pays.html

[v] https://www.nytimes.com/interactive/2019/05/09/business/dealbook/tech-ipos-uber.html

 

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