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.1,2
At 12:01 am on 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.3,4
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.
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.
The Week Ahead: Companies Reporting Earnings
- Monday: Take-Two Interactive (TTWO)
- Tuesday: Agilent (A), Ralph Lauren (RL)
- Wednesday: Alibaba (BABA), Cisco (CSCO), Macy’s (M)
- Thursday: Applied Materials (AMAT), Nvidia (NVDA), Walmart (WMT)
- Friday: Deere & Co. (DE)
|Market Index||Close May 10||Week %||YTD %|
|Treasury||Close May 10||Week %||YTD %|
|10 Year Note||2.47||-0.07||-0.22|
Sources: wsj.com, treasury.gov - 5/10/19 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. Weekly and year-to-date market index returns are expressed as percentages. 10-year Treasury note yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond. Weekly and year-to-date 10-year Treasury note yield differences are expressed in basis points.