Wild ride for stocks! – Here’s what you need to know…

Stock Market Update Sunday, May 19th, 2019

The markets went on a wild ride last week!

On Monday, stocks were hammered. With the sell-off, the major indices traded at lows not seen since March.

Then on Tuesday, stocks bounced back.

On Wednesday, it looked like we were going to see another sell-off. But after opening the day almost 1.0% lower, the S&P rallied and finished the day with a small gain.

Stocks were higher on Thursday as well. And after Monday’s rough start, all of a sudden the S&P was looking at a 3-day win-streak!

But on Friday stocks were all over the place.

The major indices opened the session near Thursday’s lows and traded lower. At one point the S&P was down 0.8%. But about 90 minutes later, the S&P had rallied 0.9% and was positive for the day!

Then in the last hour of trading, CNBC reported that scheduling has been put on hold for further trade talk discussions, and stocks dropped.

Here’s what traders were focused on last week:

  • Trade – Last week’s swings were really all about trade. A week ago Friday, the Trump administration raised tariffs from 10% to 25% on $200 billion worth of Chinese products. And in retaliation on Monday, China announced plans to raise tariffs on approximately $60 billion of U.S. goods. During the week, China accused the U.S. of “bullying behavior” which resulted in severe setbacks. And on Wednesday, data showed that in March China sold more U.S. Treasurys than it has in 2.5 years – a move that some would consider a threat. 
  • More Trade – Last week the Trump Administration made it difficult for U.S. companies to do business with Chinese telecom Huawei Technologies. Issuing an executive order, Trump banned U.S. firms from using technology produced by a company that is viewed as a national security risk without a license. Some of the bigger companies that do business with Huawei like Qualcomm (QCOM), Qorvo (QRVO) and Micron Technology (MU) were down last week, losing 5.1%, 14.8%, and 7.4% respectively.

Here’s where the major indices ended the day:

  • The S&P finished with a 0.8% loss. Down 22 points, the S&P ended at 2,860.
  • The DOW ended lower by 0.7%. Dropping 178 points, the DOW closed at 25,764.
  • The NASDAQ was down 1.3%. With a 101 point loss, the NASDAQ finished at 7,816.

Crude Oil (CL) finished higher after a 3-week losing streak. Up 1.7%, CL ended at $62.73 a barrel.

In Earnings news, Baidu (BIDU) lost 16.5% after disappointing earnings, largely due to weakness in China.

And Deere (DE) lost 7.7% after worse than expected numbers, saying that the ongoing trade war with China is one reason for the disappointing results. Deere finished the week lower by 13.6%.

Tesla (TSLA) was smacked with a 7.6% loss after CEO Elon Musk told employees that he will be making some “hardcore” cost-cutting decisions. Tesla finished the week lower by 11.9%.

This upcoming week retail will be in the spotlight with some big names like Target (TGT), Best Buy (BBY), Lowes (LOW), and Home Depot (HD) report earnings. Traders will also keep an eye on the FOMC Minutes released Wednesday.

Here is the economic calendar for the week:

Real Time Economic Calendar provided by Investing.com.

This Stock Market Update was provided by Rockwell Trading Services LLC.

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