Market Commentary, 05/21/19

Stocks had a rough start last Monday as the latest escalation in the US-China trade war weighed on the market, and they remained choppy throughout the week. Later in the week tensions eased, stocks bounced back, and the major indexes ended the week with modest weekly declines: Dow -0.8%, the S&P 500 – 0.7%, and Nasdaq -1.3%.

As we mentioned last week, China responded to a US tariff increase by boosting tariffs on $60 billion worth of American goods, effective June 1. China’s retaliation on Monday sent the S&P 500 and the Dow down more than 2%, while the Nasdaq dropped more than 3%, posting its biggest daily decline of the year. It should be noted that this news brought stocks down in Asia and Europe also.

While tensions with China escalated, the Trump administration reported progress in trade talks with other nations. On Friday, negotiators reached an agreement with Canada and Mexico to end US-imposed tariffs on steel and aluminum, and delayed a tariff decision involving imported auto parts. (www.wsj.com; 05/17/2019)

In positive news for the week:

• Retailers have reported strong Q1 results, with 80% of those that have announced results so far beating analysts’ earnings estimates. (factset.com; 05/10/2019)
• The buyback bonanza continues. As of May 16, reported stock buybacks for Q1 are up nearly 8% from 2018. (spdji.com; 05/16/2019)
• Crude oil prices are increasing and topped $63 per barrel on Friday, the highest in about four weeks. (finance.yahoo.com; 05/20/2019)

Economic data for the week included both first-time jobless claims and housing start numbers coming in better than expected. Several days last week the market opened down only to reverse course and rally into the close, which is viewed positively. However, it is evident that US-China trade concerns are driving the market. (www.investors.com; 05/16/2019)

Regards,
Jeremiah Patterson, CFP^®

Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
jeremiah@copelinfinancial.com

Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC. Advisory services offered through Investment Advisors, a division of ProEquities, and Harvest Investment Services, LLC, Registered Investment Advisors. Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.