The good news?  In less than 7.5 hours it will be all over and the weak equity performance for the month of May will be nothing more than a bad memory.  We can only hope that June doesn’t provide any sort of meaningful encore.

One of the catalysts for this morning’s weakness is – you guessed it – tariffs.  But this time the tariffs have nothing to do with China.  Instead, it’s Mexico, as the Trump Administration announced that that it will enact new tariffs on imports if the country doesn’t do anything to stem the flow of illegal immigrants into the US.  At the rate things are going, it won’t be long until the list of countries we aren’t threatening with tariffs will be shorter than the list of countries who we are threatening (or maybe it already is).

Besides the tariff announcements with Mexico, other news pressuring equities this morning include a weaker than expected Manufacturing PMI in China (49.4 vs 49.9) and weaker than expected Retail Sales in Germany.  The latter has pushed the yield on the 10-year German bund down to a record low of negative 0.205%.  Over here in the US, the 10-year yield has sunk to 2.16%, and the yield curve has further inverted to a new low of negative 17 basis points.

Please click the link below to read today’s Bespoke Morning Lineup for more of our thoughts on the latest tariff announcements.  Also, make sure to check out our latest B.I.G. Tips report for a recap of prior down opens to end the month.


With the weak economic data across the globe, markets are increasingly betting that the FOMC will be forced to cut rates at some point in the near future.  Between now and January, the futures market is pricing in a 94% chance of at least one rate cut.  Even more surprising is that the market is pricing in better than a 37% chance that the Fed Funds rate will be cut by at least 75 bps!  At some point, push has to come to shove.  Will the market bend to the FOMC’s view or will it be the other way around.

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