Weekly Market Recap May 12, 2019

Trade deal worries between China and the U.S. dominated the headlines all week.   A large gap down Monday morning due to some Trump tweets was mostly fended off as buyers came in hot and heavy.   A significant selloff ensued Tuesday.   The rest of the week ended up choppy but without significant end of day moves up or down.

Trump’s tweet Sunday night was:

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….

Then Friday those tariffs were announced as happening although there will be a grace period before they are instituted which market watchers believe is to allow time for the late stages of this trade agreement to continue.

“Goods currently in transit to the U.S. from China aren’t subject to the new 25% tariffs, just the old 10% tariff. That grace period was not included in previous rounds of tariffs and is likely an olive branch of sorts to the Chinese side,” Tom Essaye, president of the Sevens Report wrote. “Given shipping times, goods sent from China today will take two weeks or so to reach the U.S., so if a trade deal is stuck in that time frame, the pain of the 25% tariffs will never be felt.”

It was a poor week for the Chinese market.