Worst week of 2019 | August correction coming? | Trump strikes EU beef deal

FRI, AUG 02, 2019

EVENING BRIEF

AS OF FRI, AUG 02, 2019 • 04:11 ET

DJIA		26485.01
		-0.37%	-98.41

S&P 500		2932.05
		-0.73%	-21.51

NASDAQ		8004.07
		-1.32%	-107.05

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	204.02	-4.41	-2.12%
MSFT	136.90	-1.16	-0.84%
CSCO	53.25	-2.14	-3.86%

S&P 500
NAME	LAST	CHG	%CHG
GE	10.00	-0.08	-0.79%
AMD	29.44	-0.42	-1.41%
BAC	29.38	-0.11	-0.37%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	29.44	-0.42	-1.41%
AAPL	204.02	-4.41	-2.12%
MU	44.08	+0.48	+1.10%

EDITOR'S NOTE

With new risks from trade wars, stocks are heading into the final weeks of summer vulnerable to a correction.

The S&P 500 just posted its worst week of 2019, thanks to disappointment over the Fed's more hawkish-than-expected policy outlook and fears President Donald Trump is ratcheting up a new front in the trade war with China that is unlikely to end anytime soon, CNBC's Patti Domm writes in her week ahead preview.

After a flood of corporate headlines, the earnings season is winding down with just about 50 major companies — including Disney, CBS and Uber — reporting in the week ahead. There are no really significant economic reports until the middle of the month.

As Julian Emanuel, head of equity and derivatives strategy at BTIG, tells Domm, "the real issue as to why there's going to be a correction in our view is there's a massive, massive vacuum here." Emanuel said the S&P 500 could see a decline to about 2,789, although he still expects to see 3,000 at the end of the year.

Barry Knapp, managing partner at Ironsides Macroeconomics, said tariff escalation has made him more risk averse and he wouldn't be surprised by a 10% correction, "or something deeper." As a result, Knapp recommended lightening up on industrials, technology and transportation stocks.

But even without the trade war, odds are high that stocks pull back in August — for the past eight years, the S&P 500 was negative during August for six of those years. If stocks really take a hit, Emanuel expects the White House to step in and halt the selling. As he put it, "if you're the president, there's no way you're going to allow an economic slowdown in an election year."