Reasons for Caution:
Tech stocks are getting hit by the China trade war. Bank stocks are lagging on worries about refinancing of corporate bonds. The energy sector is slumping as crude oil declines. Retail stocks have been taken to the woodshed on concerns of increasing costs due to tariffs.
Uncertain monetary policy is another concern as quantitative tightening continues. When the Federal Reserve unwinds its balance sheet, money is drained from the banking system. The Fed reduced their balance sheet by $27 billion during the week ended on May 15. During the week of May