March 15, 2018.
Stocks on Wall Street recorded declines yesterday after President Trump sought to impose new tariffs on China, thereby increasing concern about a trade war that could hike costs and hurt the sales of American exporters. The Trump administration is pressuring China to cut its trade surplus with the U.S. by $100 billion. Trump is seeking to impose a tax of $60 billion on imports from China, the focus being the tech, communication and apparel sectors.
The earnings season just ended, the latest developments in Washington now being much weightier for investors. From an economic standpoint, the possible effects of import taxes continue to shake up the market.
Trump already set down the groundwork for steel and aluminum tariffs, along with import taxes on solar panels and washing machines, inciting threats about a backlash from another of U.S. trade partners. Boeing (BA), a company investors see as especially vulnerable as far as retribution goes, fell by 2.5%, leading the losers yesterday on the Dow.
Did the Dow Jones fall 1% yesterday because of the concerns about America’s trade deals with China? Or was it because of the impressive Democratic showing in Pennsylvania?
These two matters are likely to have an impact, but our market is conducting itself in an environment that is a lot more complicated than the news being good or bad. In this market, events serve as a trigger for movement. If the technical conditions are right, negative news could trigger buying. We’ve seen this phenomenon play out a number of times during the drama playing out surrounding import taxes and trade wars. In effect, the market has traded up since Trump initially announced that he’d be imposing a tariff on aluminum and steel due to traders aggressively buying the bad news.
Yesterday, the market faced a problem; it wasn’t clear whether it should buy the correction or aggressively chase the momentum. We saw a gap up at the opening due to positive news from China, but that wasn’t enough to shape movement from hereon in.If the markets had opened at a negative gap against the backdrop of a trade war or the special congressional Pennsylvania elections, presumably, we’d see more triggers for buying the corrections, though things didn’t develop to the extend needed, leaving traders few possibilities, and they settled for selling their positions into the strength.
The important point is that navigating this market correctly requires an understanding of the strategy prevailing on the market. It doesn’t have to do with good news vs. bad news. It has to do with capitalizing on the news to get an edge. When things seem like it’s clearly the time to sell, look to buy the correction – and the reverse!
The market is looking for the news to justify the market’s next move. Neither the bulls nor the bears can feel too at ease. We’re not seeing the market trending in either direction now, but rather, we’re seeing a market constantly looking for the next short-term catalyst.
Daily Summary: The Dow Jones fell 1%, the S&P 500 slipping 0.57%. The NASDAQ shed 0.19%.
Another weight on investor sentiment yesterday was the figures showing U.S. retail sales having fallen for the third month in a row in February, pointing to a slowdown in the Q1 growth pace.
One of the stocks drawing attention yesterday was Signet (SIG), which tumbled 20.2% after releasing its last quarter results as well as a disappointing full-year forecast.
Ford (F) rose 2.2% after Morgan Stanley analysts upgraded their rating on the stock from “underweight” to “overweight,” concomitantly raising its earnings forecast for the carmaker.
On the S&P 500, 12 stocks rose to new 52-week highs, 5 dipping to new yearly lows; on the NASDAQ, 96 stocks recorded new 52-week highs, 41 falling to new yearly lows.
About 6.53 billion shares changed hands on U.S. exchanges, compared to the 7.14 billion average over the last 20 trading days.
Thursday’s Hot Stocks: BKS, DDD, WSM, TLRD, CTRP, BITA, DG
Have a great trading day!
|Tuesday||6:00||NFIB Small Business Optimism Index||107.1||Medium|
|Tuesday||8:30||Consumer Price Index||0.2 %||Medium|
|Wednesday||8:30||Retail Sales||0.4 %||Medium|
|Wednesday||10:00||Business Inventories||0.5 %||Medium|
|Wednesday||10:30||Oil Inventories||2.4 M barrels||Low|
|Thursday||8:30||Jobless Claims||230 K||Medium|
|Thursday||8:30||Philadelphia Fed Business Outlook Survey||23.3||Medium|
|Thursday||8:30||Empire State Mfg Survey||14.6||Medium|
|Thursday||8:30||Import and Export Prices||0.3 % / 0.3%||Medium|
|Thursday||10:00||Housing Market Index||72||Medium|
|Friday||8:30||Housing Starts||1.284 M||Medium|
|Friday||9:15||Industrial Production||0.3 %||Medium|
|GBT||Global Blood Therapeutics Inc.||PM||Monday|
|COUP||Coupa Software Incorporated||PM||Monday|
|DKS||Dick’s Sporting Goods, Inc.||AM||Tuesday|
|GDS||GDS Holdings Limited||AM||Tuesday|
|SIG||Signet Jewelers Limited||AM||Wednesday|
|JUNO||Juno Therapeutics, Inc.||PM||Wednesday|
|CTRP||Ctrip.com International, Ltd.||PM||Wednesday|
|BITA||Bitauto Holdings Limited||AM||Thursday|
|DG||Dollar General Corporation||AM||Thursday|
|ULTA||Ulta Beauty, Inc.||PM||Thursday|
|TIF||Tiffany & Co.||AM||Friday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy”
No.1 – TAL
|Company Name||TAL Education Group|
|Sector||Services | Rental & Leasing Services|
Risk Rates: Normal – Regular size, High –Consider reducing size, Low – Consider increasing size