US Stock Market Overview – Stocks Slide Despite Robust Confidence

Trade tensions weigh on stock prices
David Becker
S&P 500 Price Forecast - Stock markets continue to grind sideways

US stocks moved lower on Tuesday after a long holiday weekend. The Dow Industrials was the worst performing of the major indices as concerns over global growth continued to weigh on stock prices. US yields continued to decline with the 10-year yield hitting a 2-year low at 2.67. Jamie Dimon the CEO of JP Morgan Chase was on the tape on Tuesday saying that the next recession would likely be cause by trade concerns. US consumer confidence remain robust according to a report released on Tuesday by the US conference board.

All sectors were lower, with consumer staples and Utilities the worst performers. Technology was the best performing sector in a bad tape. In a sign that investors are really concerned about growth, the bond rally pushed the 10-year yield further below the yield on the three-month Treasury bill. An inverted curve is a clear sign that traders believe that a recession is in the cards.

US Consumer Confidence Remains Robust

US consumers remain optimistic despite a rollover in the stock market and a widening trade dispute between the US and China. The Conference Board’s Consumer Confidence Index, jumped to 134.1, up from April’s reading of 129.2. Expectations were for the consumer confidence index to rise to 130, up from the prior reading of 129.2.

Nomura is Bearish on US Economic Growth

Raising tariffs on all Chinese goods will likely hurt US economic growth, according to Japanese financial firm Nomura. President Donald Trump has claimed on several occasions that the US has collected billions of dollars in tariffs paid by the Chinese, but this claim is untrue.

Jamie Dimon was also on the tape today saying that the next recession could be cause by the trade dispute. Dimon said he believes this is a real issue, and that trade has gone from a dispute to a war. If it continues to go south in a bad way there will be other issues that arise. Dimon, the longest-tenured CEO among the US megabanks. He said that the next recession will probably be caused by a confluence of factors that catch investors off guard, like impacts from the trade war or rising interest rates.

There could be further fallout from the Trump administration’s offensives on Huawei technologies which is aimed at frustrating the 5G ambitions of China. This move might end up impeding America’s wireless ambitions, as well. Recent White House actions land as China and the US race to launch the superfast cellular networks, with Huawei and its Chinese customers targeting a nationwide 5G rollout next year. A US Commerce Department measure, designed to hinder Huawei from buying critical components, might make it harder for American and European telecom-equipment makers to buy certain supplies as well.

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