Trade Pessimism Leads Investor Sentiment Lower

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as trade pessimism leads investor sentiment lower. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

US futures point to slightly higher open

The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018.

The S&P 500 (SPY) dropped -1.56% today. All 11 sectors finished in the red as shown below in the sector graph. Communication services (XLC), consumer discretionary (XLY), energy (XLE), financials (XLF), healthcare (XLV), industrials (XLI), materials (XLB) and technology (XLK) led the market lower, each losing more than 1%. Consumer staples (XLP), real estate (XLRE) and utilities (XLU) each suffered small losses of less than 1%.

The Dow Jones index gave back -313 points (-1.19%) to close at 26,164. The Nasdaq lost -132 points (-1.67%) to settle at 7,823.

Trade Pessimism Leads Investor Sentiment Lower

Stocked ended lower on Tuesday as a mixture of news led stocks in the negative.

The U.S. expanded its trade blacklist to include some of China’s top artificial intelligence firms on Monday, punishing Beijing for its treatment of predominantly Muslim ethnic minorities. China’s foreign ministry said to “stay tuned” for retaliation following the blacklist expansion. Also weighing on stocks was a statement by the State Department saying that the U.S. would impose a visa ban on Chinese officials linked to the Muslim abuses.

Stocks found some support after Federal Reserve Chairman Jerome Powell said the central bank will expand its balance sheet “soon.” He noted this measure will be used as a response to the recent funding issues the bond market faced in recent weeks.

To be sure, this is not quantitative easing. Rather, Powell was referring to a more gradual increase to the balance sheet.

Key Takeaways…

I took the following CNBC screenshots today regarding exposure to China, China investment limits and driving the action:

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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10/8/19

S&P 500 Sector Graph

Trade Pessimism Leads Investor Sentiment Lower

S&P 500 (SPY)

Trade Pessimism Leads Investor Sentiment Lower

Communication Services (XLC)

Trade Pessimism Leads Investor Sentiment Lower

Consumer Discretionary (XLY)

Trade Pessimism Leads Investor Sentiment Lower

Consumer Staples (XLP)

Trade Pessimism Leads Investor Sentiment Lower

Energy (XLE)

Trade Pessimism Leads Investor Sentiment Lower

Financials (XLF)

Trade Pessimism Leads Investor Sentiment Lower

Real Estate (XLRE)

Trade Pessimism Leads Investor Sentiment Lower

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

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