Market Perspective for May 13, 2019

China put tariffs on $60 billion worth of U.S. imports on Monday, with rates ranging from 5 percent to 25 percent. The S&P 500 Index declined 2.41 percent on the day.

Apple (AAPL) led the technology sector lower when the Supreme Court allowed an antitrust lawsuit to proceed against the firm. Apple slid 5.82 percent on Monday. iPhone users sued the company saying its 30 percent fee charged to app providers was abusing its monopoly power over the store. Apple claimed that users didn’t have standing to bring the case, only developers could sue over the fees, but the Supreme Court disagreed. SPDR Technology (XLK) slipped 3.77 percent.

Defensive sectors outperformed. SPDR Utilities (XLU) gained 1.07 percent and SPDR Consumer Staples (XLP) dipped only 0.94 percent.

Low volatility ETFS continued their relative strength. iShares Edge MSCI Minimum Volatility USA (USMV) declined 1.21 percent, far less than the broader market. Vanguard Dividend Appreciation (VIG) also held up well.

April economic data, including retail sales, industrial production, housing starts and building permits will be released this week. Economics forecast retail sales will have increased 0.7 percent and 0.2 percent ex-autos. They predict industrial production dipped 0.1 percent. Analysts see housing starts hitting an annualized 1.209 million pace and permits at 1.296 million.

The National Federation of Independent Business will report its April small business confidence index on Tuesday. The National Association of Homebuilders releases its homebuilder confidence index and the University of Michigan will release its preliminary consumer sentiment reading.

Alibaba (BABA), Nvidia (NVDA), Cisco (CSCO), Macy’s (M), Children’s Place (PLCE), Jack in the Box (JACK), Wal-Mart (WMT), Baidu (BIDU), Applied Materials (AMAT) and Deere & Co (DE) headline earnings this week.

 

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