Not Again. Trade worries never seem to go away, and that has stocks trading lower this morning. Talks with Canada remained in a tough spot, while tariffs on $200 billion of Chinese goods could be put in place as soon as Thursday. In today’s Morning Movers, we…
Summer’s over, but trade worries are still here…and that has stocks sinking this morning.
S&P 500 futures have declined 0.1%, while Dow Jones Industrial Average futures have dropped 73 points, or 0.3%. Nasdaq Composite futures have fallen 0.3%.
Not much has changed since last week, however. Negotiations between the U.S. and Canada are set to restart on Wednesday, but President Donald Trump continues to bash America’s neighbor to the north. And tariffs on $200 billion of Chinese goods could go into effect on Thursday. “Headlines from last week, and over the long weekend, tend to show ongoing uncertainty from trade to emerging markets, to Italian debt, strength of the dollar, and strength of the U.S. economy,” writes NatAlliance Securities‘ Andrew Brenner. “Trade negotiations and threats of pulling out of the WTO are certainly worth watching…at some point it will have a negative move in the equity markets.”
And maybe that’s why Wall Street is feeling kind of blah despite the S&P 500 sitting near record highs. BofA Merrill Lynch strategist Savita Subramanian and team note that firm’s sell-side indicator dipped to 56.4, a nine-month low. Because it’s a contrarian indicator, that’s actually good news – the S&P 500’s total return has been positive over the following 12 months when the indicator has been this at least this low, and suggests a 12% return including dividends over the next 12 months. Subramanian is quick to point out that she’s not expecting that big a gain, but it does suggest that there may be more upside to come.
First, we have to get through September.
Conn’s (CONN) has climbed 7.3% to $44 after its earnings and sales topped Wall Street expectations.
Facebook (FB) has slipped 1.2% to $173.71 after being cut to Neutral from Buy at MoffettNathanson.
PG&E (PCG) has jumped 4.9% to $48.45 after being raised to Outperform from In Line at Evercore ISI, and to Buy from Neutral at BofA Merrill Lynch.
United Parcel Service (UPS) has advanced 1.5% to $124.70 after being upgraded to Strong Buy from Market Perform at Raymond James.
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