Stocks routed on Monday as trade tensions send major indices into red

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  • Dow Jones, S&P 500 and Nasdaq all decline early on Monday as US-China trade tensions resurface just three days after positive comments from US President Donald Trump about a potential deal
  • Apple Inc. down again after new Wall Street Journalreport shines light on further production cuts for the XS, XS Max and XR smartphones
  • Facebook drops on news of discontent as CEO Mark Zuckerberg and COO Sheryl Sandberg exchange frank views on company’s recent missteps

Wall Street started the new week in negative territory as renewed concerns about trade in the long-running US-China standoff sent investors running for cover just 72 hours after President Donald Trump’s dovish comments had set the tone for a flurry of gains on Friday.

Stocks were routed after the first bell, ending a three-session hot streak for the three major indices. The Dow Jones Industrial Average dropped 396 points (-1.56%) to 25,017, and the S&P 500 declined 1.66%. The Nasdaq saw the biggest contraction, heading into the red to the tune of 3.03% on a less-than-memorable morning.

Apple Inc. cannot seem to catch a break at the moment; a new report from the Wall Street Journalspoke of further production cuts for flagship iPhones. The recent arrival of the XS, XS Max and more budget-focused XR appears to have done little to inspire smartphone enthusiasts, and lower demand and excess inventory stemming from the three-model lineup is believed to have disrupted Apple’s global supply chain.

Apple became the first company to be valued at $1 trillion just six weeks ago, but it has since slumped 18.5% as investors continue to weigh up whether the company has hit “peak iPhone” and will able to diversify its product line moving forward. Apple shares were down 3.7% on Monday.

Nissan Motor Co. fell 5.74% after the company revealed in an official statement that chairman Carlos Ghosn had violated policy and misused company funds following an extensive investigation. Various reports in Japan over the weekend claimed Ghosn now could be arrested.

Facebook went into negative territory (-5.72%) on reports of a bust-up between CEO Mark Zuckerberg and COO Sheryl Sandberg, with the former allegedly putting the blame for the company’s recent missteps on her shoulders. The second-in-command is now worried about her role at Facebook, according to sources who divulged information to the WSJrecently.

JD.com Inc was also down 8.4% after falling short of expectations on revenue growth. The company had a difficult quarter as growth cooled to its slowest pace in four years, with execs stating that a lack of demand for big-ticket items had been a drag. Revenue did increase 25% year-on-year, but that figure is considerably short of the 60% growth recorded in 2015, just a year after it debuted publicly.

Investors are paying close attention to global oil markets at the moment as Saudi Arabia continues with plans to rein in output and prices were up again on Monday, despite evidence of production increases stateside. The fallout from the Jamal Khashoggi murder also continues to rumble on, with the White House getting close to releasing an official report on what happened.

The current global benchmark for oil, the January delivery brent crude contracts, was up 39 cents compared to the previous session, with each barrel now available for just over $67. WTI contracts for December also soared 57 cents. Although the rise has been steady during the last week, it is still 25% off the peak seen in early October.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam