US Stock Markets Ended May 31, 2019

Bob Carey
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US Stock Markets Ended May 31, 2019

Posted Under: Weekly Market Commentary

Domestic equities experienced losses last week as disappointing trade news dominated headlines. U.S. President Donald Trump returned from his trip to Japan with news that a near-term trade deal didn't seem likely, China "was not ready to make a long-term deal' and then ended last week announcing new tariffs on Mexico in an effort to stem the flow of illegal immigrants into the U.S. The new tariffs on imports from Mexico are scheduled to start on June 10th at 5% and to escalate to 25% by October 1st. Mexican President Lopez Obrador has sent his foreign minister to Washington D.C. to negotiate with U.S. officials to try and avoid the June 10th tariffs. U.S. 1Q19 annualized GDP growth was revised down to 3.1% from the previously announced 3.2%. Both measurements were well ahead of economist projections of 2.3% from April and speak to the strength of the U.S. economy. Uber Technologies Inc. announced quarterly financial results for the first time since their IPO on May 9th and saw shares up 1.5% Friday, while the general market was down. The company is focused on becoming a one-stop shop for local transportation and commerce. In 1Q19 they averaged 17m trips per day, with an annualized booking rate of $59b or 41% year-over-year growth. The company did manage to lose over $1b last quarter, mostly from promotional costs as they continue to strive for acceptance in many of their end markets. U.S. retail continues to struggle, the most recent casualty was The Gap Inc. Despite restructuring plans to spin off their Old Navy brand, the stock fell 9.3% on poor earnings and has fallen 26% for the year. Looking ahead, tariff and trade news will likely drive near-term market returns. Remembering the strong U.S. macroeconomic picture of robust job market, strong corporate earnings and sturdy GDP growth is important for long-term stock market investors. We currently remain constructive on equities long-term, making these near-term dips in equities favorable entry points.

Posted on Monday, June 3, 2019 @ 8:01 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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