Trade Tensions Linger

The Week on Wall Street

Stocks drifted lower last week as investors considered the possibility that the world's two largest economies might take some time to resolve key trade issues.

The S&P 500 retreated 1.17% and the Dow Jones Industrial Average, 0.69%. The concern over trade was felt elsewhere: International Stocks also lost 1.41% in five sessions.

Market Waits for Further Trade Talk Cues

A compromise on tariffs between the U.S. and China did not seem forthcoming last week. Negotiations appeared stalled. Regardless, President Trump and Chinese President Xi are slated to meet at June's G20 summit in Japan.

The Department of Commerce has effectively banned U.S. companies from doing business with Chinese tech giant Huawei, a major global player in 5G technology. Some analysts think China may respond with retaliatory measures.

Eventually the U.S and China will complete a trade agreement, as there is too much at stake for both countries. Until then, it will continue to be bumpy in the investment arena and headlines will continue to move markets in the short run.

Leading Retailers Report Earnings

Big-box stores and other major retail chains announced first-quarter results last week. While some traditional department store chains disappointed (Kohl's, JC Penney, Nordstrom), Macy's recorded its sixth straight quarter of comparable sales growth. Target reported a 10.8% jump in earnings in the first quarter, Walmart announced Q1 gains in earnings and revenue, and Urban Outfitters saw record sales in Q1.

Final Thought

As new chapters in the U.S.-China trade drama continue to unfold, remember that our investment approach is built around your long-term objectives and risk tolerance. There will always be day-to-day price changes; there will always be breaking news alerts. The disciplined, long-term investor does look out for major opportunities and dangers, but only adjusts for those when warranted.