May 13, 2019 Market Report
A quick note on today’s market:
After approaching an all-time high, the Dow was down 582 points or 2.38% today along with the S&P 500 down 2.41% and the technology heavy Nasdaq was down 3.41% led by Apple. Five of the 30 stocks that make up the Dow Industrials accounted for over 300 points of the loss - Apple, Boeing, Caterpillar, United Technologies and Goldman Sachs. On-going trade tensions with China were the culprit today but overall a pullback can be healthy after an extended run. Trade talks ended Friday without a deal and each side is now engaged in back and forth tariff increases. While the possibility always exist for the situation to begin to spiral, we believe it is mainly posturing within the negotiation process.
Neither side benefits from a full-blown extended trade war. With that belief, we took the opportunity to rebalance portfolios today. Even if we get further declines, this is an attractive level within the markets and room remains to further rebalance should the markets decline another level. There are continuing concerns about slowing global economic growth however a well-diversified portfolio is a strong answer. Our growth and value portfolios, while down along with the Dow Jones Industrial Average, still outperformed by almost 30% today and our Income & Appreciation Portfolio outperformed by more than 55%.
Apple led the markets down with a double dose of bad news. China is a major partner and consumer market for Apple and the U.S. Supreme Court ruled that iPhone owners can sue the company for alleged App Store monopolization. The industrial sector is most sensitive to higher tariffs so Boeing, Caterpillar and United Technologies reacted accordingly.
As always, please feel free to call to discuss your portfolio. We appreciate the opportunity to serve you.