EDITOR'S NOTE
Stocks cheered China's seemingly softer stance on trade Thursday, as the country's Ministry of Commerce said it wanted to resolve the trade war with a "calm" attitude.
The rally came despite data showing tariff tensions are still weighing on the global economy. Worldwide trade continued to stumble in the second quarter of 2019. Global exports in major countries contracted by 1.9% and imports by 0.9% for the quarter. China saw a 5.3% slowdown — the lowest level since the end of 2017. In the U.S., exports dropped by 1.1%.
The U.S. economy also slowed a bit more than initially thought last quarter. GDP growth was revised down to 2% from 2.1% on Thursday, in line with economists' expectations. Strong consumer spending was offset by falling exports.  Business sentiment has also taken a hit. Wall Street earnings growth estimates have come down drastically since the beginning of the year, when many investors were expecting a knockout year for the U.S. economy, CNBC's Maggie Fitzgerald writes.
At the start of 2019, analysts estimated S&P 500 profit growth for the year would be around 7.6%, according to FactSet. That number has slumped to 2.3%. The percentage point drop in estimates is the biggest decline in three years, since 2016 when estimates fell from 7.8% to 1.3%, FactSet data shows.
Matt Maley, Miller Tabak managing director and chief market strategist, points out that even if the U.S. economy avoids a recession, the economy is slowing and earnings growth is "grinding to a halt." As Maley said, "It's hard for the market to rally a whole lot from here."
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