The Dow Jones Industrial Average is looking to avoid its first decline in five days as it fell over 150 points to start Thursday’s trading session.
Investors fretted over earnings reports as retailer Macy’s reported that same-store sales increased by just 1.1 percent in November and December. Furthermore, Macy’s reduced its revenue guidance for fiscal 2018.
In addition, American Airlines cut its revenue growth forecast for the fourth quarter, while other airlines–Delta Air Lines, JetBlue Airways and Southwest Airlines–fell as much as 3 percent.
Fourth quarter earnings will be ramping up as the big banks, such as Bank of America, Wells Fargo and JP Morgan Chase are scheduled to report earnings next week.
“The power of the recovery rally in US and global equities has been impressive,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management. “As encouraging as all of this has been to witness it does not change the fact that a sell-off of this magnitude does not happen in a vacuum.”
“The decline marks a key downward-shift in the long technology driven bull market,” Shaoul added. “There is simply no way to tell at present whether we have witnessed the completion of a brief but tumultuous sell-off.”
U.S.-China Trade Negotiations Continue
Markets edged higher on Wednesday as optimism on a U.S.-China trade deal lifted the markets in the early trading session.
The markets have been building momentum on reports surfacing that the U.S. and China are narrowing their differences as trade negotiations continue. As China’s economy languishes, this could be a major factor in negotiating a permanent trade deal.
On Monday, U.S. President Donald Trump said that talks with China on a trade deal were progressing and that weakness in the country’s economy is paving the way towards a resolution. The president also tweeted on Tuesday that talks with China are moving forward in the right direction.
Talks with China are going very well!
— Donald J. Trump (@realDonaldTrump) January 8, 2019
President Trump and Chinese President Xi Jinping met at the G-20 Summit in Buenos Aires, putting global markets on pause as the two economic superpowers met to hopefully ameliorate their trade differences. As part of the agreement, both nations agreed to withhold imposing further tariffs on each other for 90 days while they work out a firm, ironclad deal.
Related: US Stocks Are in for a ‘Bumpy Ride’: Walser Wealth Management President
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