In yesterday's MORNING COFFEE REPORT, I stated that the market would open higher by about +12 points, the same number we fell on Friday because of China news. Little did I know that President Trump would threaten tariffs on two new fronts—Argentina and Brazil. The President is claiming that the countries are manipulating their currency to get an unfair advantage over the US. Truth be told, the countries have major issues and that is why their currencies are free-falling.
Prior to the open, the Minis were up +10 points (not the 12 points I was expecting), but the news took the Minis down to unchanged.
After the open, the SPX fell -8 points on the tariff news. Thirty minutes (30 min) after the open, the ISM manufacturing numbers and construction spending numbers came out horrendous. This took the Minis lower to a net change of -$22. The rest of the day, the Minis stayed at that level and lower, with the lows being -30.22.
The end of the day saw an attempt to run higher, but that was stuffed lower. The SPX closed down -27.11 (-0.86%). The Dow closed down -268.37 at 27,783.04 (-0.96%). THIS WAS THE FIRST DAY IN 36 DAYS that the market closed down more than 0.5%.
Interestingly, bonds were hammered down by -2.11 (-1.5%) at 138.31 as measured in the TLT.