S&P 500; US Indexes Fundamental Weekly Forecast – China-US Negotiations Will Be Supportive News

The major U.S. stock indexes churned through another choppy week of trading as investors tried to gauge the impact of the simmering tensions between the United States and China over trade tariffs.

In the cash market, the benchmark S&P 500 Index settled at 2604.47, down 1.4%. For the year, the index is down 2.6%. The blue chip Dow Jones Industrial Average closed at 23932.76 down 0.7%. It is down 3.2% in 2018. The tech-driven NASDAQ Composite finished the week at 6916.39, down 2.1%. It is still up 0.2% for the year.

The week started with China’s finance ministry announcing in a statement published April 1 it would impose retaliatory tariffs on up to 128 kinds of U.S. goods, following through on a treat initially made March 23 by Beijing that it would target $3 billion worth of American imports.

On April 3, President Donald Trump unveiled a list of Chinese imports his administration aims to target as part of a crackdown on what the president deems unfair trade practices.

China, on April 4, countered the latest move by the U.S. by announcing additional tariffs on 106 U.S. products.

On April 5, President Donald Trump said he instructed the United States Trade Representative to consider $100 billion in additional tariffs against China.

The week ended with China’s Commerce Ministry saying the country will not hesitate to react with a “major response” to new tariffs from the U.S.

U.S. Economic Data

The Bureau of Labor Statistics reported on Friday that non-farm payrolls rose 103,000 in March while the unemployment rate was 4.1 percent, falling well short of Wall Street expectations during a month where weather caused havoc on the jobs market.

Economists and traders were looking for a payrolls gain of 193,000 and the unemployment rate to decline one-tenth of a point to 4 percent. This number represents a huge drop from the upwardly revised 326,000 in February. January’s figure was revised down from 239,000 to 176,000.

The closely watched average hourly earnings figure rose 0.3 percent against estimates of 0.2 percent. This pushed up the annual rate to 2.7 percent.

Forecast

The U.S. stock market’s bumpy ride is expected to continue this week with concerns over an escalating trade war likely to remain at the forefront. Additionally, there are a few U.S. economic reports that could rattle traders.

This week, we’re expecting trade fears to continue to rise. The wildcard associated with this event is the negotiations between China and the United States. Are they secretly going on? Will there be a formal announcement and scheduling of the event? These are questions investors want to know.

If stocks begin to rally then this will indicate that investors are anticipating a peaceful resolution to the trade issues. If stocks tumble then it will mean they expect the trade wars to escalate.

Whether the market goes up or down, volatility is here to stay. In other words, we’ll see violent moves on both side of the needle.

This week, investors will also get the opportunity to react to fresh consumer and producer inflation data.