How Much Of The Slowdown Is Associated With Trade Tariffs?

Posted: Jun 06, 2019 9:18 AM
How Much Of The Slowdown Is Associated With Trade Tariffs?

Source: AP Photo/Matt Rourke

The economy seems to be further bifurcated with the service side holding up nicely, but manufacturing is beginning to slide.  After two years of miraculous growth, including massive job growth, we knew manufacturing could slow, but the question was to what degree. Moreover, how much of the slowdown is associated with trade tariffs, and how much is associated with global economic slowdown is still an unknown.

  • Headline  56.9 +1.4 percentage points
  • Business activity 61.2 +1.7 pp
  • New Orders 58.6 +0.5 pp
  • Employment 58.1 +4.4 pp
  • Imports 50 -5.0 pp
  • New export orders 55.5 -1.5

There is no doubt the economy has slowed, but I think it is part of the natural flow and not a sign of pending doom.

ISM non-manufacturing

Message of the Session

Although the market rallied into the close, which is always a great sign, the session was cautious and there continues to be clear signs of concern in several areas. 

Sellers were more motivated than buyers, as there was more down volume for the NYSE and NASDAQ.  Moreover, the carnage in high Beta names, which  mostly trade on NASDAQ, continues to underscore parts of this rally are a flight to safety via equity exposure.




  • Advancers 1,504
  • Decliners 1,464
  • New Highs 171
  • New Lows 60
  • Up Volume 1.16 billion
  • Down Volume 1.79 billion


  • Advancers 1,317
  • Decliners 1,762
  • New Highs 93
  • New Lows 116
  • Up Volume 833.5 million
  • Down Volume 978.7 million

The cautious tone of the session resulted in safe haven Utilities and Real Estate significantly outperforming Communication Services.

On the note, the tech rebound continues to be led by chip and software names.

S&P 500 Index



Communication Services (XLC)



Consumer Discretionary (XLY)



Consumer Staples (XLP)



Energy (XLE)



Financials (XLF)



Health Care (XLV)



Industrials (XLI)



Materials (XLB)



Real Estate (XLRE)



Technology (XLK)



Utilities (XLU)



Portfolio Approach

We put cash to work this week- if you missed the report or any alerts please reach out to your rep or

Communication Services

Consumer Discretionary

Consumer Staples












Real Estate











Today’s Session

I’m a little surprised equity futures are higher this morning.  None of the trade questions have been answered.  On the contrary, there is more saber rattling and threats. Once again, conventional wisdom is drifting toward the notion deals will be done.

Remember to pause today to think about and thank perhaps the greatest day of the Greatest Generation: D–Day.

God Bless

On June 6, 1944, more than 160,000 Allied troops landed along a 50-mile stretch of heavily fortified French coastline, to fight Nazi Germany on the beaches of Normandy, France. Gen. Dwight D. Eisenhower called the operation a crusade in which, “we will accept nothing less than full victory.” More than 5,000 Ships and 13,000 aircraft supported the D-Day invasion, and by day’s end, the Allies gained a foot-hold in Continental Europe. The cost in lives on D-Day was high. More than 9,000 Allied Soldiers were killed or wounded, but their sacrifice allowed more than 100,000 Soldiers to begin the slow, hard slog across Europe, to defeat Adolf Hitler’s crack troops.