The Strength of the Market is: Weak

The stock market was pounded last week as investors are fearing that President Donald Trump has ignited a global trade war that will lead to a recession. On Friday alone, the Dow Jones dropped 5.5%, the S&P 500 lost 5.97% and the Nasdaq declined by 5.8%, some of their biggest one-day declines since the Covid-19 pandemic. The stock market is violently reacting to President Trump's tariff blitz, which was announced on Wednesday evening and, then, was followed by China imposing a retaliatory 34% tariff on all US products. The bull market seems to be dead. Although, Wall Street is hopeful that stocks may be close to the bottom, in the short-term. The fear now is that the trade war escalates and the US doesn’t back down. For the week, the S&P 500 dropped 9%, its worst week since the breakout of Covid-19 in early 2020.

Economic reports from last week came back mixed:

•Construction Spending - higher than expectation

•Job Openings - lower than expectation

•Vehicle Sales - higher than expectation

•Employment (Private) - lower than expectation

•Employment (Total) - higher than expectation

•Jobless Claims - lower than expectation

This week, investors will look for guidance from economic reports like Consumer Credit, Small Business Optimism, Inflation, Consumer Sentiment and Jobless Claims.