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US Stock Markets Ended August 2, 2019
Stocks had their worst week of 2019 last week. After slightly trading down on Monday and Tuesday, stocks moved sharply lower on Wednesday after the 25 basis point cut by the Federal Reserve. President Donald Trump followed up on Thursday with the announcement of additional tariffs on Chinese goods making investors worry that the move would disrupt the global economy. The one-two punch of uncertain future rate cuts by the Fed and a volatile trade relationship with China caused stocks to dip lower to end the week. The weekly move in stocks was the sharpest drop since December 2018. The two sectors hit the hardest by the renewed trade rhetoric were Consumer Discretionary and Information Technology. Both groups have heavy exposure to international trade and the increased cost of their inputs will weigh on profitability. Financials stocks also had a down week as lower interest rates will reduce profitability on lending practices. On the other end of the interest rate spectrum, Real Estate and Utilities led the market as investors search for yield in a lower rate environment. Deal activity picked up to lift Health Care stocks after Mylan and Pfizer agreed to combine Mylan with Upjohn, Pfizer's off-patent medicine business, to create a new global pharmaceutical company. The deal, expected to close by June of 2020, caused shares of rival Teva to jump on the news. Next week, the markets will be listening to talks of trade, nuclear pacts with China and Russia, and earnings from 65 companies in the S&P 500.
Monday, August 5, 2019 @ 8:24 AM
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.