May 23, 2019

It was a very ugly session today as stocks suffered a global sell-off. Ongoing China worries, coupled with discouraging flash PMIs, sparked the sell-off. China continues to dominate the narrative as Washington escalates its tech war against Beijing, ostensibly foreclosing the possibility of a trade compromise. There doesn’t seem to be any substantive talks occurring between the two sides and media reports suggest China has no interest in resuming negotiations until the restrictions imposed on Huawei are lifted (although there is still a month before Trump and Xi will meet at the G20). No longer do investors view this as “just a negotiation” and fear the two sides are settling in for a protracted economic war (which will be waged in the realms of trade, tech, etc.). If the China overhang wasn’t enough, the global growth backdrop has taken a notable turn for the worse with the Eurozone PMIs failing to bounce while the U.S. readings fell precariously close to the 50 growth/contraction threshold. The U.S. 10-year Treasury yield fell to levels not seen since 2017. Oil futures saw the worst trading day of the year, and copper dropped back to January levels. Equity weakness was broad, led by the energy patch and technology. Utilities and homebuilders saw some relative strength with the push lower in rates.

– After Market Movers:
-DECK Reports Q4 $0.85 v $0.10e, Rev $394.1M v $377Me; +5.1% afterhours
-HPQ Reports Q2 $0.53 v $0.51e, Rev $14.0B v $14.1Be; +3% afterhours
-HPE Reports Q2 $0.42 v $0.36e, Rev $7.15B v $7.44Be; +2% afterhours
-INTU Reports Q3 $5.55 v $5.39e, Rev $3.27B v $3.24Be; +1.9% afterhours
-ROST Reports Q1 $1.15 v $1.12e, Rev $3.80B v $3.81Be; -2% afterhours
-ADSK Reports Q1 $0.45 v $0.47e, Rev $735M v $741Me; -5% afterhours
-LGF.A Reports Q4 $0.11 v $0.18e, Rev $914M v $939Me; -9% afterhours