The markets pushed higher today ahead of the tariffs on China, which go into effect tonight. Despite a slow news day for stocks, the Dow 30 closed higher by 181, the S&P 500 added 23, and the Nasdaq 100 closed higher by 83 thanks again to tech stocks. $34 billion in tariffs on China are coming, and it's widely expected that China will retaliate immediately.
The Federal Reserve released the minutes of their recent meeting, which showed that they were reducing their GDP outlook as well as showing increased concern about the trade war. This pulled stocks off their highs slightly following the release.
Sector News
Semiconductor stocks (SMH ) were higher today with Intel (INTC ) and Micron (MU ) leading the way. The SMH gained 2.5% as Micron confirmed the news from Tuesday that China was blocking the sales of some of their chips, though it expects it will have only a "minor impact on revenue."
Healthcare (XLV ) stocks were modestly higher today continuing their uptrend off April lows. Money has been slowly and quietly moving into this space as investors continue to find value on the dips.
Oil (USO ) fell 1.6% today after a rise in US inventories pushed prices lower. Trump continues to accuse OPEC of pushing prices higher, but OPEC responded by saying it was Trump that would push prices higher, not them.
Stock News:
Starbucks (SBUX ) shares were slightly lower on news that a barista mocked a customer's stutter. The man complained to Starbucks customer service and they offered him a $5 store credit. The company closed all their stores last month to conduct anti-bias training after two men were arrested at their store. It's possible that the relatively minor incident received so much media attention because it was such a slow news day.
Facebook (FB ) co-founder Chris Hughes says that the government should tax the rich at 50% and then hand out $500 a month to low income citizens. He says the fact that he made $500 million for 3 years of work is exactly what is wrong with this country. Shares were higher today along with many other tech stocks.
In other news, weekly jobless claims came in higher than expected at 231,000, but analysts note that the overall trend still suggests a tightening labor market. The government's monthly payrolls report is due out tomorrow morning.
Morningstar was just the latest to try to temper expectations on market returns, publishing an article saying the next 10 years will be the "lost decade" for market returns. Given the 100% returns in the last 10 years analysts at Vanguard and JP Morgan (JPM ) are just a few that have cautioned investors about expecting higher-than-average returns.
