Unfortunately, by using the title “Never Surrender” I am not writing about how we should all rollback time today and break out our cassette tapes to listen to 80’s pop star Cory Hart’s hit “Never Surrender” or even “Sunglasses at Night.” However, this action might make you feel better after a day when we saw the markets crash.
The crash was triggered by the US-Chinese trade war and specifically where the Chinese retaliated first by stating that they would “never surrender” to outside pressures and then proceeded to list 5,000 items that they would add tariffs to ranging between 5% to 25% & covering U.S. goods from agriculture, chemicals, fabrics & metals ( approximately $60 Billion). These new tariffs are to take effect on June 1, 2019. These tariffs were in retaliation to Washington’s move last week to add 25% tariffs on $250 billion of Chinese goods that took effect last Friday at 12:01 am when the two sides failed to come to an agreement. This disruption of the world markets is now believed to last longer than anticipated and is believed will further hurt the bottom line of many leading multinational corporations and the markets descended.
The S&P 500 sharply dropped a respectable 2.41% today ending at 2811.87 and below the 50-Day moving average or 2863. The Dow fell 2.38% ending at 25,324.99 while the Nasdaq and the Russell 2000 got hit the hardest cascading down 3.41% and 3.2% respectively. This crash was led by many of our favorites. i.e. Apple (AAPL) which dropped an eye-catching 5.81% and closing $185.72 post hitting $184.70 at the low of the day after the Supreme Court decided to allow iPhone users to pursue an App Store antitrust case & Amazon (AMZN) which dropped 3.56% as it closed at $1822.68 after touching $1818.00 at its low point.
With fear rampant volatility to the downside won again today with force. The CBOE Volatility Index (VIX) jumped into the close $20.55 or up a whopping 28.12% realizing the daily range of $18.35 – $21.32. The 2x leverage ETF TVIX closed at $29.61 up 27.85% and traded between $27.14 and $29.98 today.
Dow 30 components Caterpillar (CAT) ended down 4.6% and Walmart (WMT) notched a nice win up 1.98% closing at $99.89.
Out of the energy sector, Chevron (CVX) was down 1.27% ending the day at $120.44. Exxon (XOM) closed at $75.71 down 1.11%.
Uber Technologies (UBER), the ride-sharing company who priced its IPO at $45 per share last week and raised a whopping $8.1 billion closed at a disappointing $37.10/share down another 10.75%.
Disney (DIS) closed at $131.34 down 2.01% today. Warner Brothers’ “Pokémon Detective Pikachu” did well this weekend opening in 4,202 theaters bringing in approx $58mm but still behind Disney’s Avengers with approximately $63mm to main the top spot.
Seattle-based biotech firm, Atossa Genetics (ATOS) saw its shares close down 2.7% at $2.52 per share.
Oil prices was down .9% .1% & closed at $61.08/bbl.
The US Dollar Index remained solid closing at 97.34.
Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.
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