The Dow Jones Industrial Average finished the day slightly lower on trade concerns but is still on pace for its best week in two years. Stocks traded broadly lower after The South China Morning Post reported that the administration’s trade hawk, Peter Navarro would attend the Trump-Xi dinner. Navarro, a hardliner on China originally was sidelined for the meeting after clashing with Trump’s top economic advisor Larry Kudlow.
US stocks did rebound off session lows after the Wall Street Journal reported that Washington would hold off on further tariffs and the two sides would discuss big changes in Chinese economic policy under the deal. Current expectations heading into the G-20 are for no major breakthroughs, but maybe a truce amongst White House and China. The US dollar was saw limited moves against most of its major trading partners.
Healthcare stocks continue shine almost doubling the performance of the broader market. During the tech collapse over the past two months, some money managers shifted into more defensive plays, such as healthcare and consumer staple stocks.
Price action on the 30-stock index shows that the recent rally is tentatively finding resistance from both the 50- and 100-day Simple Moving Averages. If we continue to see softness, initial support may come from the 25,070 level, with major support coming from the 24.750 level. If the Dow is able to rise and take out the psychological 26,000 level, key resistance will come from the 26,750-27,000 zone.