After yesterday’s thrashing, markets rebounded somewhat with the Dow up 207 at 25,532. Trading volume tracked lower indicating that big buyers were not rushing back into stocks. IBD switched to “market in correction” and we have yet to hear from BTS, but they utilize defensive trailing stops on positions and so might be pending a trade to the sidelines.
CNBC’s Jim Cramer reported that most of the tariff increases that China announced yesterday are related to agriculture products and include southern pine, Doug fir, corn, wheat, apples and even frog legs. Yes, it’s true…we export frog legs! Speaking of apples, Geek Wire tech magazine had an article on a robotic apple picker coming to Washington State. Check out the article and video on our Faceplant page. I guess you can say that these robotic apple pickers suck.
Speaking of the trade war, UBS analyst Jay “Softy” Sole wrote in a report that any disruption in supply chains between China and the US could hit the soft goods retail segment given the fact that brick and mortar stores are already under pressure from online retailers like Amazon. Soft goods include clothes, shoes etc and companies like Nordstrom’s, Macy’s, J. Crew and Steve Madden operate in this space. Jay thinks the combination of intense pressure from online sales coupled with disruptions in trade could cause upwards of 12,000 brick and mortar stores to be shut down if the trade war lasts.
Shares of Boeing were hit hard yesterday due to a couple of factors. One is that Boeing is the crown jewel of US manufacturing/exporting and as such it could be a very visible target if the trade war escalates. Another reason for the pullback is that the expected relaunch of the 737 Max got pushed back from July to maybe August which means Boeing will deal with storage issues and cash flow for a bit longer than anticipated. Shares rebounded a bit today and may be finding support after selling off 23% from its all-time recent high.
The Boy Scout meeting tonight will be what we call GNO or “guys night out”. No uniform but food is served and tonight we have the annual laser tag event in Federal Way. Expect a big crowd of excited kids to partake and run around like crazy for an hour with nick names like “Connor McLeod from the clan McLeod”, “Husky Boy” or “Nutella”.