 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Friday's Headlines 1. U.S. Markets Rise Heading into Holiday Weekend 2. Growth Forecasts Get Cut 3. Brexit Update 4. Next Week's Most Important Chart Markets Closed
Year-to-Date
 U.S. Markets Rise for the Day, but Down for Fifth Week in a Row U.S. markets held onto early gains today ahead of the holiday weekend, but will end down 1% for the week, the fifth consecutive week of weekly declines. This will be the longest stretch of weekly declines since 2011, but it comes as the S&P500 and the Nasdaq hit record highs in April. This is what markets do, lest we forget.
The apparent derailing of the U.S. China trade talks is the easy culprit, but there are other factors at play.
Here's the S&P500 over the past 5 weeks:
chart courtesy www.koyfin.com  What's Next The U.S. China trade war will come to some kind of resolution, eventually. But, the longer it goes on, the more uncertainty creeps into the economy and into investors' psyches. Companies are already tightening their belts, which could lead to less spending and hiring.
We've already seen early signs of the pullback in yesterday's Purchasing Manager's Index, which hit a multi-year low.
Today, we saw it manifest in April's durable goods orders in the U.S., which fell 2.1% as exports slowed and inventories climbed. That's what happens in a trade war. The trend over the past 7 months tells you everything you need to know.
chart courtesy Fred. St. Louis  We'll get reports on consumer spending, sentiment and a revised GDP reading for the first quarter of 2019, next week. We should not be surprised to see consumer's reigning in their spending over the past month or so as the trade war heated up again. JPMorgan's Economics team already cut their 2nd quarter GDP forecast from 2.25% growth to just 1% today. Expect to see more of that next week.
May Bids Farewell as EU Elections approach British Prime Minister resigned her premiership this morning, although she will stay on as a kind of 'caretaker' prime minister until June 7th, when her Conservative Party will start a process to replace her that could take several weeks. May was unable to steer the UK through the Brexit process, which she promised to do when she took over for David Cameron. Opposition in her own party, the British Parliament and among EU members proved to be too much for May, who was unable to push her plan through that labyrinth. The British Pound, which had been falling hard over the past week, rallied today as investors bet on a favorable outcome once a new P.M. is elected. History is not on their side.
May's resignation came right as elections for the European Union Parliament began. It's a four day process taking place across the member countries of the EU. Ironically, Great Britain still has a vote even though it should have exited the EU via Brexit by now. We all know that didn't happen, and might not until October 31st.
According to Eurobarometer, here are the key issues European voters care about most going into these elections. 
chart courtesy www.koyfin.com  A big day in the global payments space as Global Payments agreed to acquire Total System Services. Both stocks popped on the deal, which is rare.  Footlocker's stock got trampled by investors today after the athletic shoe retailer missed on earnings and sales. Footlocker was among the coalition of shoe retailers that wrote the letter to President Trump protesting the trade war and threatening massive price increases if it continues.  Word of the Day Given the passage of the Setting Every Community Up for Retirement Enhancement Act, by the U.S. House of Representatives yesterday, we thought this term/law seemed appropriate for today.
The SECURE Act is a bipartisan bill designed to aid Americans' ability to save for retirement. The bill seeks to improve the country's retirement prospects. The bill passed the House of Representatives in a 417-3 vote.
The SECURE Act is a piece of legislation that is designed to ease the looming retirement savings crisis by:
In addition:
It still needs to pass in the Senate, but this will become a very big deal for investment advisors and money management firms.  photo courtesy sothebys.com
Today in History May 24, 1688: The earliest known book on the stock market, Joseph Penso de la Vegas Confusion de Confusiones (Confusion of Confusions), appears. His anecdotes of the Amsterdam stock exchange read like modern Maalox moments: When speculators talk, they talk shares...when they look at something, it is shares they see...if they eat, the shares are their food...and even on the death bed, their last worries are the shares.... The speculator fights his own good sense, struggles against his own good will, counteracts his own hope, acts against his own comfort, and is at odds with his own decisions.
Joseph de la Vega, Confusion de Confusiones (Baker Library, Harvard Graduate School of Business Administration, Cambridge, MA, 1957), pp. xi, 22. Chart of the Day: British Pound Bounces on Theresa May Resignation  It's official. After intense speculation over UK Prime Minister Theresa May's future as Britain's leader amid ongoing Brexit chaos, May announced her resignation on Friday. Just last week, Brexit talks between the two major parties – the ruling Conservative Party and the Labour Party – ended in failure yet again, prompting a continued sharp sell-off for the British pound. Up to that point, the Brexit negotiation process had long been rife with setbacks and chaos as Theresa May attempted three times without success to get her deal passed in Parliament. Last month, the European Union granted the UK a substantial extension of the original Brexit deadline, to October 31 of this year.
After three full weeks of plunging against the U.S. dollar, the British pound received a boost on Friday with May's resignation announcement. This is likely due to hopes that a new leader may be better equipped to unite the country and the warring factions in Parliament with respect to a Brexit deal. Whether such a leader will emerge remains anyone's guess. Going forward, the pound will likely be subject to significantly increased volatility as uncertainties surrounding new leadership and Brexit negotiations intensify.
The chart above shows the GBP/USD (British pound vs U.S. dollar) chart. The U.S. dollar has been relatively strong of late, helping to weigh on the GBP/USD currency pair. But for the past three weeks, the sharp drop in the currency pair can be attributed in large part to increasing weakness in the British pound due to widespread skepticism over parliamentary Brexit negotiations and Theresa May's viability as prime minister.
In the past three weeks, GBP/USD has fallen sharply from near 1.3200 down to the 1.2600 handle on Thursday. Though Friday's pop on May's resignation is a hopeful sign of respite for the beleaguered pound, near-future uncertainties are apt to apply further pressure on sterling as the likelihood of a no-deal, or hard, Brexit remains on the rise. In this event, the next major downside target for GBP/USD currently resides around the key 1.2500 support level.
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Friday, May 24, 2019
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