There was little refuge last week as all five of the major markets experienced a significant pullback.
The S&P 500 treaded water ahead of Wednesday’s FOMC Announcement. At 2:00 PM ET, the FOMC announced the first rate decrease in 11 years. Going into this meeting, odds were strongly in favor of a 25-basis point reduction, but the possibility of a 50-basis point reduction was also fairly high. Although some sort of  cut was wildly expected, the S&P 500 sold off shortly after 2:30 PM ET while Federal Reserve Chairman Jerome Powell was making his post conference comments.
https://www.federalreserve.gov/monetarypolicy/files/monetary20190731a1.pdf


What appeared to significantly roil the markets was Powell’s classification of this interest rate cut as a “mid-cycle adjustment to policy”. This leaves the prospect of future rate decreases as merely a possibility, not a path.

https://www.cnbc.com/2019/07/31/fed-chief-powell-says-rate-cut-was-a-mid-cycle-adjustment.html

Powell stated “That refers back to other times when the FOMC has cut rates in the middle of a cycle and I’m contrasting it there with the beginning of a lengthy cutting cycle,” The markets appeared to be hoping for a larger cut or at least a clear path towards a more accommodative policy. This uncertainty was an unwelcome surprise to a market that has been operating with a fairly clear sense of anticipation ahead of each of the prior FOMC Meetings over the last two years.
https://www.youtube.com/channel/UCAzhpt9DmG6PnHXjmJTvRGQ

On Thursday, the S&P 500 began to recover most of the prior day’s losses until President Trump tweeted around 1:30 ET that China has not followed through on their promises to avoid additional tariffs. As a result, he announced another 10% tariff on $300 billion worth of goods imported from China. These new taxes are set to go into effect on September 1st.

The market sold off substantially on this news and the selling continued into Friday, ahead of the weekend. When the closing bell rang at the end of the week, the S&P 500 registered the worst weekly loss so far this year.

The Chinese market did not escape the impact of this news either. The MSCI China Index fell over 5.5% last week, pulling the overall emerging market countries along with it.

Unfortunately, the geopolitical news will not lighten up this week. On Sunday, China declared that they would be suspending the purchasing of US agricultural products for the time being. Furthermore, they have not ruled out additional retaliatory tariffs on the import of US products.
https://www.bloomberg.com/news/articles/2019-08-05/china-asked-state-buyers-to-halt-u-s-agriculture-imports

______________________________________________

The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries.

https://us.spindices.com/indices/equity/sp-500

The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

https://us.spindices.com/indices/equity/dow-jones-industrial-average

The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes

https://indexes.nasdaqomx.com/Index/Overview/COMP

The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.

The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.

https://www.msci.com/

The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.

https://us.spindices.com/indices

Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®).

https://us.spindices.com/indices

 

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