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Two Headwinds For Stocks, S&P 500 to Kick off the Week

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More headwinds are blowing in the faces of stock investors globally Monday. 

After a rough Friday, the S&P 500 was down to flat Monday morning, with the Dow Jones Industrial Average down 0.15%. Still, the tech-heavy Nasdaq was up 0.11%. 

Here's what's moving the market:

Headwind 1

Trade continues to be top of mind for U.S. investors Monday. Friday, President Trump said he doesn't feel the "need" for a trade resolution before the presidential election, sending chills down the spines of investors. China had also shortened a meeting between itself and the U.S. This is a 'one-eighty,' as the two sides had shown signs of more conciliatory negotiating tactics, making markets more optimistic on a trade deal. 

With nothing new on the trade front, sentiment is weighing on the stock market, keeping gains muted and losses more prevalent. 

Headwind 2

The Eurozone continues to see weak manufacturing activity, as Germany teeters on the brink of recession

The EU manufacturing index contracted to 45.6 for the month of September, missing economists estimates of 47.3, and below August's result of 47. Any result below 50 is a contraction. 

Here are five highly UE-exposed U.S stocks:

  • McDonalds (MCD)
  • PVH (PVH)
  • Fiat-Chrysler (FCAU) -2.15%
  • DuPont de Nemours (DD)
  • Honeywell (HON)

The 10-year treasury yield fell to 1.69% Monday, cementing Monday as a 'risk-off' day. Should the U.S.-China trade war escalate, economic data could worsen to the point that the Federal Reserve may cut interest rates for a third time in 2019, which would be a positive for stocks. 

DuPont and Honeywell are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these? Learn more now.

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