May 31, 2019

The markets closed lower as investors feared President Trump’s surprise threat of tariffs on all Mexico imports, amid the ongoing trade negotiations with China, could risk sending the US economy into a recession. Last evening, Trump announced the US would impose a 5% tariff on all Mexican imports beginning June 10 until illegal immigration across the southern border was stopped and would increase even further if Mexico fails to take “dramatic action” to reduce or eliminate the problem. Today’s losses add to a horrid week and month in the markets with the major indices closing in the red across the board:

DOW -354 at 24815
SP500 -36 at 2752
NASDAQ -114 at 7453

The 10 Year Treasury closed down 8 basis point to yield 2.13%, in a flight to quality
Oil prices closed -3.44 at 53.15 a barrel
Gold prices closed +18.40 at 1310.80 an ounce

In the days’ stock news:

  • Auto companies were hit particularly hard on the Mexico tariff news with shares of GM dropping nearly 5%, Ford down almost 3% and Fiat Chrysler down over 5%.
  • Corona and Modelo beer maker Constellation Brands slid 6.5% and was headed for its worst day since January 9th.
  • Kansas City Southern, a railroad that has high exposure to Mexico was down 4.5% on the day.