The Dow Is Down as October's Worries Return

Michael Haddad

Back to Real Life. The midterms are over, the Fed remains on course, and the earnings season is coming to a close. With those areas of uncertainty in the rear-view mirror, the market will need to refocus on the economic backdrop and the impact of trade. Stocks slipped on Friday with all three major indexes down as of midday. In today’s Intraday Update, we…

…Look at trade and the G-20 summit;

…Check on consumer sentiment in November;

…And explore what a stronger economy could mean for different groups.

Deep Waters, Strong Currents

With the midterm election behind us, the market is now back to its old themes and investors are realizing that things haven’t got any better.

The Dow Jones Industrial Average has tumbled 242.71 points, or 0.9%, to 25948.51, while the S&P 500 was off 29.22 points, or 1.0%, to 2777.61. The Nasdaq Composite has lost 136.93 points, or 1.8%, to 7393.95.

Trade remains one of the main threats to global growth. All eyes are now on the G-20 summit at the end of November, where President Donald Trump and Chinese President Xi Jinping are expected to meet.

“We continue to believe that the outcome of U.S./China trade talks are crucial to global markets. A deal, or at the very least a ceasefire that suspended tariff increases due in January would improve the global growth outlook for 2019, particularly with policy easing in China,” writes James Barty, strategist at Merrill Lynch Bank of America, in a note on Friday. “Failure would accentuate the deterioration in global growth and fully justify investors’ fears.”

Despite the uncertainty about trade, consumers remain upbeat. November’s Consumer Sentiment index remained near its high point for this economic cycle, with a

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