Just Rising, US Stocks Continued to Decline

The US stock market lost points when it closed on Tuesday although it had previously set a new internal record. Investors were somewhat disappointed to hear that the US would probably maintain tariffs on Chinese goods until after the Presidential election in November 2020.

Bloomberg reported that whether the US completely eliminates tariffs imposed on Chinese goods will depend on China. It is Beijing’s compliance with the first-stage trade agreement that the two sides are expected to sign on Wednesday (January 15).

The S&P 500 is at a record level with the average price / earnings ratio (P / E) of the stocks in the index at 18 times. According to Joe Saluzzi, Director of Themis Trading, investors view the Bloomberg news as a reason to take profits.

Mr. Saluzzi used to compare the current mood of investors with the character of super spy in the action film series The Bourne of Hollywood movies. According to him, US stocks are in a market like Jason Bourne. The first thing when Jason Bourne enters a room is to find a way out in case he needs to.

All three Dow Jones, S&P 500 and Nasdaq hit an internal record before fading in the afternoon. While the S&P 500 and Nasdaq fell at the close, Dow Jones closed with a slight gain.

The US stock market has risen sharply in recent weeks thanks to optimism that the US-China trade war escalation will help boost the profits of listed companies.

Reuters cites sources that China has pledged to buy an additional $ 80 billion in manufactured goods and an additional $ 50 billion in energy from the US in the next two years.

JPMorgan Chase, the largest US bank, rose 1.2 percent after the bank opened its fourth-quarter earnings report on Wall Street in 2019, overall profitability was better than forecast and revenue growth was good. in the transaction and underwriting sectors.

Wells Fargo shares plunged 5.4% after the financial report showed that profits dropped because the bank had to spend $ 1.5 billion on provision of legal expenses. Citigroup shares rose 1.6% thanks to earnings that exceeded expectations.