U.S. markets are set to open with heavy selling today after President Trump threatened tariffs on Mexico last night. Investors are worried this action could risk pushing the economy into a recession. European shares sold off on the news while Asian fell at first but rebounded to end the day.
The S&P 500 closed higher with low volume and did not move back above the 2800 level. If the index should move through potential support at 2776.06, the next level of possible support will become 2725.00. This would be considered bad technical damage to the index and could exacerbate the selling of stocks. Traders will be on alert today for any break of these key support levels.
The U.S. Ten-Year Treasury fell to its lowest yield since 2017 at 2.178 %. Economist are growing concerned this is another sign the U.S. economy could be heading for a recession. The fed funds futures are now predicting three rate cuts by the FOMC this year. Data on April consumer spending will be released today and could ease the recession fears if the data is positive.
We are currently long term bullish with short term cautious.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, Windsor Wealth
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum Oscillator that measures the speed and changes of price movements.
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