May 19, 2019
Weekly Market Outlook
By Keith Schneider
US Equities got hit yet again, led by Grandpa Russell, (IWM) which tanked -2.4% on week. The trade war with China escalated, as did tensions with Iran which sent Oil (USO) up almost +2%. Stocks went into a nasty retreat on a global basis. Not surprisingly,the exceptions were Russia and Switzerland.
Looking South of our Border, Brazil got hit the hardest down over -8% for the week, which basically wiped out the gains since Jair Bolsonaro was elected last winter. The new populist president has been losing confidence as the country is flirting with a recession. Adding to the pressure is the fact that Emerging markets are most sensitive to trade wars.
This week’s highlights are:
Last week we mentioned we had mixed feeling on the next big move in Equities but were leaning bearish. One reason was that our Real Motion indicator that measures momentum pointed to big negative divergences that is in alignment with other negative readings highlighted above. Remember, we are still a tweet away from just about any outcome so invest accordingly, which means maintain maximum flexibility and use intelligent risk control.
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Best Wishes for your trading!
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