Dear Moneyist,

My mom is an otherwise sane, smart and independent woman. At 60 years old she has worked for over 40 years, has been a home owner in New Jersey for over 40 years as well and has always been on top of her bills, credit and responsibilities. About 5 years ago she became involved in a relationship with a man who I can only call a con artist.

This man has a history of theft, deception, bad credit and bad decisions. He has deceived a few employers and the Internal Revenue Service. He has been living with my mom in her current home, which she owned for about 15 years before they met. He does not pay his share of the bills, often giving her only $100 to $200 a month, but often times borrowing much more than that throughout the month.

Read also: We plundered our 401(k) to invest in a friend’s business — now we fear it’s a Ponzi scheme

He has made statements to her during arguments such as, “I have a legal right to this house and should be on the deed” and “I legally have 30 to 60 days to leave if you try to kick me out.” I believe both of these statements to be a crock of bull, but I am just curious to know what his true “rights” are.

There are other ways he is emotionally abusive as well. He has never changed his residence on his driver’s license to my mom’s house and the only thing connecting him to the property is a cable bill. I am hoping to sort this out on her behalf, as she seems to be blinded from the truth. Since becoming involved with him, her credit has worsened and she seems to be struggling financially.

This is not the woman I remember.

Daughter

Dear Daughter,

Your mother may need a financial adviser or an advice columnist to weigh in on her affairs, at some point. Today, she needs an intervention.

Even at 60 years of age, she is a prime candidate for elder financial abuse. She is alone and she has money. That’s an attractive combination for a would-be predator. And while most of this kind of abuse comes from family members, it also happens disproportionately to people with no spouse. Your mother hasn’t married this man, which is a small mercy. It’s not too late to act.

You need to assemble of team of trusted family members and friends, alert your mother’s bank, and hire a lawyer who may decide to do a background check. As a group (and when her boyfriend is out of the house, of course) you should sit down with your mom to explain that you’re all worried about her but that you are there to support her as she severs ties with this man.

The National Adult Protective Services Association recommends closing any joint bank accounts, establishing power of attorney (if possible) and putting a responsible person or agency in place to manage your mother’s assets.

Don’t miss: My husband has terrible credit, so I’m buying a house alone—and I want pullout beds for his kids

It sounds like your mother has made efforts to remove him from her house and her life. That’s a good sign. On some level, she knows that this man is bad news. Contact your mother’s lawyer, bank and/or adult protective services in your state. If he is not on the deed and her safety is an issue, you can also contact local law enforcement (and a lawyer) to ask advice.

If he is not on a lease and is not paying any rent or contributing to bills, then he is mistaken about his rights to live there for the next 30 to 60 days. He may believe he is a tenant, but he is merely a guest. He has far fewer rights as a potentially unwelcome guest who is helping himself to your mother’s funds, and bullying her into a such a state that she dare not ask him to leave.

Also see: My fiancé postponed our wedding, secretly bought a house—and told me I could pay rent

If she asks him to leave, and he doesn’t he could be guilty of “defiant trespassing.” You can read more about that here. In New Jersey, you can file an eviction lawsuit without any advance notice if they have refused to pay rent.

Why is your mother living with a man who treats her badly? It’s the same reason other people let ne’er-do-wells into their life, and allow them to take control: Fear and loneliness. A recent survey of 20,000 U.S. adults found that nearly half of people suffer from feelings of loneliness. Loneliness is both a health and social issue. It can also lead to difficult and upsetting situations such as this.

It could be worse. (Usually, but not always, it could be worse.) A member of the Moneyist Facebook Group posted this harrowing story about a manager at a financial firm in Hong Kong who gave 14 million Hong Kong dollars ($1.78 million) to a man who she met on a dating site. He pretended to be a British film director. But here’s the most unbelievable part: They never actually met in real life.

Some people will allow the wrong person into their life, even if a loving relationships still eludes them and the companionship they think they have is just an illusion.

Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyist and please include the state where you live (no full names will be used).

Would you like to sign up to an email alert when a new Moneyist column has been published? If so, click on this link.

Hello there, MarketWatchers. Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas: inheritance, wills, divorce, tipping, gifting. I often talk to lawyers, accountants, financial advisers and other experts, in addition to offering my own thoughts. I receive more letters than I could ever answer, so I’ll be bringing all of that guidance — including some you might not see in these columns — to this group. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

More from MarketWatch

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Nutanix Inc. shares are heading for their second big post-earnings tumble in as many quarters after the cloud company missed revenue expectations and delivered a disappointing outlook.

“Looking ahead, management expects revenue to decline on a year-over-year basis, despite maintaining [operating expense] growth in the 40% range,” wrote Piper Jaffray analyst Andrew Nowinski. “It is clear that this model is unsustainable, requiring massive amounts of spending just to support modest revenue growth, which we believe is attributable to competition.”

See more: Nutanix stock drops as revenue, outlook miss Street view

Nowinski downgraded Nutanix’s stock

NTNX, -15.07%

 to neutral from overweight following the report, while lowering his price target to $28 from $47. He pointed to Dell Technologies Inc., which showed triple-digit growth for its VxRail product Dell’s own earnings report on Thursday afternoon, as evidence of the rising competition in the market.

Competition from Dell was one of the factors behind Morgan Stanley’s downgrade of Nutanix prior to the report.

Nutanix shares are off 21% in morning trading Friday.

In a note titled “Some Things Better Done in Private,” Jefferies analyst John DiFucci said that Nutanix “reminded us last night why some companies go private before embarking on a major model/business transition.” The company has been moving toward a subscription software model, which has been a source of its execution challenges.

“We note that subscription revenue is not as predictable as it sounds because it includes term-based licenses which are recognized upfront instead of ratably,” DiFucci wrote. “We expect the highly predictable revenue to increase when most customers are converted to term-based licenses that will roughly renew according to the average duration (3.7 years).”

This dynamic “is part of why the company missed this quarter despite transitioning subscription revenue to 59% of total revenue,” said DiFucci, who has a buy rating on the stock but cut his target price to $40 form $49.

Don’t miss: Zuora shares looks like ‘dead money’ as they plunge toward worst drop on record

Raymond James analyst Simon Leopold commented that investors seemed already cautious heading into Nutanix’s latest report, but that the company’s outlook for sales and cash burn, as well as the departure of its chief product development officer, will come as further concerns.

“We think it could take several quarters for Nutanix to return to double digit year-over-year growth, so the stock may lack catalysts,” Leopold wrote. He rates the stock at market perform but argued that he thinks the shares can ultimately “recover” as Nutanix looks well positioned in the duopoly for hyper-converged infrastructure.

William Blair analyst Jason Ader said that Nutanix’s situation “is definitely worse than we expected,” but he’s comforted by the company’s decision to move its “well-regarded” leader of sales for Europe, the Middle East, and Africa to the helm of its Americas sales team. This transition could buoy execution going forward, he argued.

He rates the stock at outperform. “While we do not expect year-over-year top-line reacceleration in the business to occur for another three quarters, and we are cognizant of rising near-term macroeconomic risks, we believe the stock is fairly washed out at this point,” Ader wrote.

Nutanix shares have lost 38% so far this year, while the S&P 500

SPX, -0.94%

 has risen 10%.

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There are plenty of things that can ruin a person’s retirement plans — divorce, illness, job loss, overspending. Some leave a retiree with a lifetime of regret.

A recent study has revealed for the first time the 10 biggest causes of financial regret among those who have retired or are near to retirement. The information may help those who are currently working and saving, by giving them more ability to plan their finances and prepare.

Read: Want to make millennials mad? Talk about saving for retirement

A survey of “Saving Regret” targeted 1,600 Americans aged 60 to 79 to ask them about whether they had saved enough money — and if not, why not. The survey was conducted by researchers from the RAND Corporation and the Max Planck Institute in Munich, Germany.

The results come at a time when many Americans are struggling to save for retirement. Savers are grappling with high student-debt levels and housing costs, as well as sluggish wage growth. Many don’t have access to retirement savings vehicles through their jobs: Only about 54 million American workers put money into a 401(k) plan in 2015, the Investment Company Institute found, while 150 million were employed in that year, according to the Bureau of Labor Statistics.

Read: You can contribute more to your 401(k) and IRA in 2019

At the top line, the study’s results make sobering reading. More than half of those polled — 59% — said they wish they had saved more. And four out of five of those with savings regrets admitted that they were now worried about meeting all their future financial needs. A third feared running out of money altogether.

These types of ratios will come to some very big numbers if today’s workers follow the same path. According to the U.S. Census, by 2035 some 78 million Americans will be over 65.

Some of the findings from the survey will hardly be news. The main cause of saving too little is spending too much. Nor is it likely to be news that those with college degrees, those who earned a lot of money, and those who inherited money from rich parents were less likely to have financial regrets in their 60s and 70s.

However, the report also found 10 retirement killers that might not be so obvious in advance. The biggest relate to major life setbacks, such as ill health, unemployment and divorce. More than half of those polled had suffered at least one such setback, and those who had were about 50% more likely to end up with financial regrets in their 60s and 70s. If we can’t prevent these things from happening we can often prepare for the risks through insurance, experts say.

Meanwhile other retirement killers, such as overestimating Social Security or failing to make a long-term plan, are more easily controlled.

Here are the 10 biggest dangers — and the probability that each one will leave you with saving regret after age 60.

1. Having very low financial literacy (81)

2. Being struck by poor health that prevents you working (79)

3. Being laid off and spending a period unemployed (77)

4. Earning less than expected (76)

5. Getting divorced (74)

6. Making bad investments (70)

7. Being hit by major medical bills (68)

8. Overestimating Social Security (69)

9. Not making long-term plans (64)

10. Procrastinating (64)

Meanwhile, nearly all of those who said they wish they had saved more money admitted that they could have done so, and were able to identify areas of their budgets that they could have cut. Respondents of both sexes said they wish they had spent less money on vacations. Men said they wished they spent less on cars, and women on clothes.

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Run for the hills.

That seems to be summing up the investor mood Friday after President Donald Trump shocked markets with a tweet promising tariffs on all Mexican imports until the illegal migrant situation is sorted. The likelihood of one more trade battlefield opening up means pretty much any asset associated with risk, notably equities, is taking a hit.

And while thoughts of scant avocado or tequila supplies may be on your mind, don’t forget that Mexico tariffs can impact big car makers, which have moved some production there — shares of Ford

F, -2.77%

 and GM

GM, -3.85%

are under pressure. Meanwhile, some are worried Europe may be next in line for tariffs, and those markets are also down sharply.

Elsewhere are reports Beijing may be readying its own retaliatory measures against a U.S. crackdown on tech giant Huawei Technologies. And China manufacturing data had a poor showing for May, thanks to U.S. trade tensions.

To be sure, May is drawing to a close with a clang for investors. The S&P 500 is facing a more than 5% loss for the month, which brings us to our chart of the day, from Joel Kruger, currency strategist at LMAX Exchange. His chart spells out the possibility that stocks will revisit levels not seen since the December meltdown.

Kruger is specifically is looking at the 2,340 reached in December 24 which was the lowest level seen for the S&P 500 in the last two years — and revisiting that level would mean a 16% drop from Thursday’s close. That’s drop is more or less what Scott Minerd, chief investment officer and one of the world’s premier bond-fund managers of Guggenheim Partners, is predicting as well.

Kruger says investors need to face up to the fact that by now, any benefits from already depleted easy central bank and government stimulus could be offset by new negative shocks to the global economy, Kruger told MarketWatch in emailed comments.

Check out his S&P 500 monthly chart:

Joel Kruger, LMAX Exchange

He says the S&P 500 is facing what he calls an “ugly reversal month,” meaning that May started with a push to a fresh record high, but has ended with the S&P 500 coming all the way back down and breaking past a low seen in April. ”It’s an ugly picture when you go higher and then can’t do anything with it,” and then take out the previous monthly low, he says.

“This reversal introduces the prospect for a deeper drop over the coming weeks, easily capable of retesting the December 2018 low,” he says.”

“Overall, we remain skeptical the equity market will be able to keep doing what it’s done over the past decade, which is to find support at every dip for a run to fresh record highs,” he said.

The market

Dow

DJIA, -1.16%

   , S&P 500

SPX, -1.17%

    and Nasdaq

COMP, -1.24%

    have opened sharply lower. Read Market Snapshot.

Trade worries are being reflected in a sharply lower Mexican peso

USDMXN, +3.1632%

Investors are seeking safety instead, via the yen

USDJPY, -0.71%

and gold

GCQ19, +0.84%

Also attracting investors are bonds, with the yield on the 2-year U.S. Treasury note

TMUBMUSD02Y, -3.13%

hitting 2% and the German 10-year government bond yield

TMBMKDE-10Y, -12.16%

 near a record low. Oil prices

CLN19, -2.72%

 are down.

Europe stocks

SXXP, -1.20%

are sliding, while the Nikkei

NIK, -1.63%

stumbled in an otherwise mixed Asian session.

The call

Investors are getting more negative on stocks, but “not bearish enough to trigger contrarian buy signals,” says Bank of America Merrill Lynch in our call of the day.

A contrarian strategy dictates that the time to buy an asset is when everyone really starts selling. It echoes a famous quote from billionaire investor and Berkshire Hathaway

BRK.A, -0.70%

BRK.B, -0.87%

 chairman Warren Buffett, who has spoken of being “fearful when others are greedy and to be greedy only when others are fearful.”

The bank bases this on its sentiment indicator shown below, which swings from 1 to 10 — extreme bear to extreme bull. It advises selling when sentiment is above 8, and buying when it drops below 2.


The economy

Personal income, consumer spending rose for April, while core was also up, according to a fresh batch of data. Still to come is the Chicago purchasing managers index and the consumer sentiment index. Data preview here.

Opinion: Trump wants poor people to disappear — so he’s making sure they do

The buzz

Trump tweeted early Thursday that Mexico tariffs will rise 5% and could go as high as 25% unless illegal immigration gets sorted. Mexican President Andrés Manuel López Obrador, told Trump in a letter that “social problems aren’t solved with duties or coercive measures” and asked for talks.

From Beijing. Hu Xijin, editor in chief of China’s Global Times, a tabloid with ties to the Communist Party, said he understands China will take “major retaliatory meaures “ against the U.S. over the Huawei crackdown.

Bloomberg reported Beijing has a ready-to-implement plan to curb exports of rare earth materials to the U.S., focusing on an important sub sector of the metal used in cars and most consumer goods.

Meanwhile, Vice President Mike Pence is reportedly planning a speech that will come down hard on China’s human rights record.

Rumors that North Korea may have executed a senior official tied to February’s failed summit between Trump and the country’s dictator Kim Jong Un, along with a few others, may not be true at all.

Amazon

AMZN, -1.40%

 may buy prepaid wireless service Boost Mobile from T-Mobile US.

TMUS, -1.67%

 and Sprint

S, -2.65%

Reuters reports.

Uber

UBER, +1.95%

reported a roughly $1 billion loss in the first set of earnings since its IPO, but shares are up as executives say a price war with rival Lyft

LYFT, +2.51%

 over ride-hailing fares is calming down.

Gap

GPS, -14.17%

 shares are dropping after an “extremely challenging” first quarter and disappointing results.

Opinion: Facebook continues to flail about in the eyes of several storms

The quote

“Tear down walls of ignorance and narrow mindedness for nothing has to stay as it is.” — That was German Chancellor Angela Merkel who got a standing ovation after her Harvard University commencement speech Thursday.

“Tear down the walls of ignorance and narrow-mindedness for nothing has to stay as it is,” Chancellor Angela Merkel #Harvard19 pic.twitter.com/rcL68ol0th

— Harvard Alumni Association (@HarvardAlumni) May 30, 2019

Random reads

Texas Sen. Ted Cruz and Rep. Alexandria Ocasio-Cortez have weirdly found common ground

U.S. rap sensation Drake is up to his NBA courtside antics again

Drake called Dray “trash” immediately after the Raptors won Game 1 😳 pic.twitter.com/vJluvzUCFa

— Bleacher Report (@BleacherReport) May 31, 2019

Liverpool fans lead the singing in Madrid as UEFA championship festivities kick off

1am here in Madrid and a fair few hundred Liverpool fans still in Plaza Mayor giving Allez Allez Allez a run out…it’ll be thousands strong here this time tomorrow night 🔴⚽️ pic.twitter.com/eiruagraBY

— Radio City News (@RadioCityNews) May 30, 2019

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.

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Zuora Inc. shares were tanking early Friday after the subscription software company highlighted product-integration and sales-execution issues in conjunction with its first-quarter earnings report.

The stock

ZUO, -29.12%

 was off more than 32% premarket and opened to the downside. If those losses carry through to the regular session, Zuora would post its worst single-day percentage drop since going public just over a year ago.

See more: Zuora stock tanks after company reports narrower loss, lowered guidance

“We expect fixing the product issues is straightforward and will just require time, but we are more concerned with the sales issues that our experience says require changes in sales leadership and nearly 12 months to correct,” wrote Needham analyst Scott Berg, who removed his top-pick designation on the stock and lowered his rating to buy from strong after the company “materially” cut its outlook.

Don’t miss: Nutanix stock drops as revenue, outlook miss Street view

Zuora now expects $268 million to $278 million in revenue for its current fiscal year, which ends next January. A few months earlier, the company had issued a forecast for $289 million to $293.5 million in revenue, taking into account the impact of new accounting standards.

Berg expects the stock to be “dead money for a quarter or two” as it works through its sales issues, but he kept his overall bullish outlook on the stock given his expectation that end-market demand is still strong.

Read: Zuora plans a partnership with Amazon Pay

Jefferies analyst John DiFucci highlighted Zuora’s challenges in integrating its Billings and RevPro products, writing that “CEO Tien Tzuo himself will lead the charge to drive product innovation and completion of the project.” He called the company’s decisions to issue a below-consensus outlook for the current quarter and lower its full-year forecast “prudent.”

DiFucci said that while Zuora’s total revenue growth decelerated relative to the prior quarter, the company’s subscription business still seems to be growing quickly, as the moderation in revenue growth was mostly driven by a slowdown in Zuora’s professional services business. He expects the company will grow at a 25% to 30% annual rate over the next five to ten years due to momentum for subscriptions.

He has a buy rating on the stock and lowered his price target to $29 from $35.

Zuora shares were up 10% so far this year, as of Thursday’s close, compared with an 11% gain for the S&P 500

SPX, -1.16%

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The bottle: Aqua Vodka, $29.95

The back story: In recent years, Americans have discovered kombucha, a fermented beverage made from tea that has been especially embraced by the youthful, hipster set. U.S. sales in 2018 alone surged by 22%, reaching $728.8 million, according to one report.

So what’s next? A kombucha vodka, of course.

Aqua Vodka, a product developed by Aqua ViTea, a Vermont-based kombucha company, is the spirit in question. It came about when Aqua ViTea was looking for ways to eliminate the alcohol that’s present in kombucha. Yes, the drink itself is naturally boozy — there’s usually just a small amount of alcohol in it, but it’s enough to worry some consumers.

When Aqua ViTea found a solution — think an alcohol-removing gizmo called a spinning cone column — it was left with another challenge. Namely, what to do with the booze that was spun off. “Rather than letting it go to waste we decided to upcycle it,” says Peter White, a brand manager behind the vodka.

Thus, AquaViTea partnered with the Appalachian Gap Distillery, a Vermont-based spirits company, on making Aqua Vodka, which was first released in late 2017.

The Aqua ViTea team admits the spirit doesn’t taste like kombucha per se. After all, the distillation process involved in making vodka is about removing much of the flavor. Still, the spirit is finding its way into many a kombucha-loving locale, from San Francisco to Brooklyn, N.Y.

What we think about it: This is a solidly made vodka that has a clean taste and a fuller-bodied mouthfeel. It is indeed not kombucha-flavored, which we find something of a disappointment, since the brand behind it is all about kombucha. Still, White, the brand manager, says it has a “nuanced taste profile from the aromatics of the green and black tea in the base brew.”

How to enjoy it: Try this neat or on ice to best appreciate it, says White. But the vodka also works in many a cocktail — say, a kombucha vodka martini.

More Weekend Sip

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Run for the hills.

That seems to be summing up the investor mood Friday after President Donald Trump shocked markets with a tweet promising tariffs on all Mexican imports until the illegal migrant situation is sorted. The likelihood of one more trade battlefield opening up means pretty much any asset associated with risk, notably equities, is taking a hit.

And while thoughts of scant avocado or tequila supplies may be on your mind, don’t forget that Mexico tariffs can impact big car makers, which have moved some production there — shares of Ford

F, +0.31%

 and GM

GM, +0.09%

are under pressure. Meanwhile, some are worried Europe may be next in line for tariffs, and those markets are also down sharply. tweak on this graph

Elsewhere are reports Beijing may be readying its own retaliatory measures against a U.S. crackdown on tech giant Huawei Technologies. And China manufacturing data had a poor showing for May, thanks to U.S. trade tensions.

To be sure, May is drawing to a close with a clang for investors. The S&P 500 is facing a more than 5% loss for the month, which brings us to our chart of the day, from Joel Kruger, currency strategist at LMAX Exchange. His chart spells out the possibility that stocks will revisit levels not seen since the December meltdown.

Kruger is specifically is looking at the 2,340 reached in December 24 which was the lowest level seen for the S&P 500 in the last two years — and revisiting that level would mean a 16% drop from Thursday’s close. That’s drop is more or less what Scott Minerd, chief investment officer and one of the world’s premier bond-fund managers of Guggenheim Partners, is predicting as well.

Kruger says investors need to face up to the fact that by now, any benefits from already depleted easy central bank and government stimulus could be offset by new negative shocks to the global economy, Kruger told MarketWatch in emailed comments.

Check out his S&P 500 monthly chart:

Joel Kruger, LMAX Exchange

He says the S&P 500 is facing what he calls an “ugly reversal month,” meaning that May started with a push to a fresh record high, but has ended with the S&P 500 coming all the way back down and breaking past a low seen in April. ”It’s an ugly picture when you go higher and then can’t do anything with it,” and then take out the previous monthly low, he says.

“This reversal introduces the prospect for a deeper drop over the coming weeks, easily capable of retesting the December 2018 low,” he says.”

“Overall, we remain skeptical the equity market will be able to keep doing what it’s done over the past decade, which is to find support at every dip for a run to fresh record highs,” he said.

The market

Dow

YMM19, -1.12%

  , S&P 500

ESM19, -1.16%

   and Nasdaq

NQM19, -1.42%

   futures are deep in the red. More coverage in Market Snapshot.

Trade worries are being reflected in a sharply lower Mexican peso

USDMXN, +2.6716%

Investors are seeking safety instead, via the yen

USDJPY, -0.69%

and gold

GCQ19, +0.78%

Also attracting investors are bonds, with the yield on the 2-year U.S. Treasury note

TMUBMUSD02Y, -2.35%

hitting 2% and the German 10-year government bond yield

TMBMKDE-10Y, -12.81%

 near a record low. Oil prices

CLN19, -2.21%

 are down.

Europe stocks

SXXP, -1.31%

are sliding, while the Nikkei

NIK, -1.63%

stumbled in an otherwise mixed Asian session.

The call

Investors are getting more negative on stocks, but “not bearish enough to trigger contrarian buy signals,” says Bank of America Merrill Lynch in our call of the day.

A contrarian strategy dictates that the time to buy an asset is when everyone really starts selling. It echoes a famous quote from billionaire investor and Berkshire Hathaway

BRK.A, +0.34%

BRK.B, +0.61%

 chairman Warren Buffett, who has spoken of being “fearful when others are greedy and to be greedy only when others are fearful.”

The bank bases this on its sentiment indicator shown below, which swings from 1 to 10 — extreme bear to extreme bull. It advises selling when sentiment is above 8, and buying when it drops below 2.


The economy

Personal income, consumer spending rose for April, while core was also up, according to a fresh batch of data. Still to come is the Chicago purchasing managers index and the consumer sentiment index. Data preview here.

Opinion: Trump wants poor people to disappear — so he’s making sure they do

The buzz

Trump tweeted early Thursday that Mexico tariffs will rise 5% and could go as high as 25% unless illegal immigration gets sorted. Mexican President Andrés Manuel López Obrador, told Trump in a letter that “social problems aren’t solved with duties or coercive measures” and asked for talks.

From Beijing. Hu Xijin, editor in chief of China’s Global Times, a tabloid with ties to the Communist Party, said he understands China will take “major retaliatory meaures “ against the U.S. over the Huawei crackdown.

Bloomberg reported Beijing has a ready-to-implement plan to curb exports of rare earth materials to the U.S., focusing on an important sub sector of the metal used in cars and most consumer goods.

Meanwhile, Vice President Mike Pence is reportedly planning a speech that will come down hard on China’s human rights record.

Rumors that North Korea may have executed a senior official tied to February’s failed summit between Trump and the country’s dictator Kim Jong Un, along with a few others, may not be true at all.

Amazon

AMZN, -0.16%

 may buy prepaid wireless service Boost Mobile from T-Mobile US.

TMUS, -0.13%

 and Sprint

S, +5.29%

Reuters reports.

Uber

UBER, -0.35%

reported a roughly $1 billion loss in the first set of earnings since its IPO, but shares are up as executives say a price war with rival Lyft

LYFT, -2.54%

 over ride-hailing fares is calming down.

Gap

GPS, -1.10%

 shares are dropping after an “extremely challenging” first quarter and disappointing results.

Opinion: Facebook continues to flail about in the eyes of several storms

The quote

“Tear down walls of ignorance and narrow mindedness for nothing has to stay as it is.” — That was German Chancellor Angela Merkel who got a standing ovation after her Harvard University commencement speech Thursday.

“Tear down the walls of ignorance and narrow-mindedness for nothing has to stay as it is,” Chancellor Angela Merkel #Harvard19 pic.twitter.com/rcL68ol0th

— Harvard Alumni Association (@HarvardAlumni) May 30, 2019

Random reads

Texas Sen. Ted Cruz and Rep. Alexandria Ocasio-Cortez have weirdly found common ground

U.S. rap sensation Drake is up to his NBA courtside antics again

Drake called Dray “trash” immediately after the Raptors won Game 1 😳 pic.twitter.com/vJluvzUCFa

— Bleacher Report (@BleacherReport) May 31, 2019

Liverpool fans lead the singing in Madrid as UEFA championship festivities kick off

1am here in Madrid and a fair few hundred Liverpool fans still in Plaza Mayor giving Allez Allez Allez a run out…it’ll be thousands strong here this time tomorrow night 🔴⚽️ pic.twitter.com/eiruagraBY

— Radio City News (@RadioCityNews) May 30, 2019

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.

Let’s block ads! (Why?)

Bloomberg

Rising incomes are helping consumers.

The numbers: Americans cut back on spending in April after splurging in March, but rising incomes suggest consumers still have plenty of buying power to support the U.S. economy in the face of rising headwinds. Inflation crept higher, but remained low overall.

Consumer spending rose 0.3% last month, the government said Friday, a tick above the MarketWatch forecast.

In March, spending surged by a revised 1.1% to mark the biggest increase in 10 years.

Incomes rose 0.5% in April, the largest gain in four months. Incomes are rising at the fastest pace since the end of the Great Recession.

A closely watched measure of inflation, meanwhile, rose in April but remained quite mild. The PCE index climbed 0.3%, or 0.2% if food and energy are stripped out.

The rate of inflation over the past year rose a notch to 1.5%. While that’s the highest level since December,it’s still well below the Federal Reserve’s 2% target.

The core rate advanced at a 1.6% yearly pace, a tick higher than in March.

Read: Weaker unions, globalization not to blame for shrinking slice of income pie for workers

What happened: Americans spent less in April on durable goods such as new cars and trucks, but they increased purchases of more perishable products as well as services such as utilities.

Since incomes rose faster than spending, the savings rate edged up to 6.2% in April from 6.1%.

Big picture: The U.S. economy is basically sitting in the middle lane of a highway. It’s unlikely to generate enough speed to justify a shift into the fast lane or slow down so much that it will be shunted to an off-ramp.

What’s keeping the U.S. in a holding pattern? Ongoing trade tensions with China and other countries, for one thing, and a slowdown in the U.S. industrial sector. Consumers also aren’t spending as much as they did last year, when lower gas prices and the Trump tax cuts gave them an extra boost.

The Fed has spurned further increases in a key U.S. interest rate this year to help the economy — and it might even cut rates unless inflation firms up. Vice Chairman Richard Clarida said this week that a “persistent shortfall in inflation below our 2% objective” could spur the Fed to ease.

Read: ‘Whiff of U.S. recession’? It’s in the air again, but strong labor market the antidote

Market reaction: The Dow Jones Industrial Average

DJIA, +0.17%

and S&P 500

SPX, +0.21%

were set to fall sharply in Friday trades after President Trump said he would impose a 5% tariff on all imports from Mexico unless the country reduces the flow of immigrants to the U.S.

Stocks have been shellacked over the past two weeks after trades talks with China broke down.

The 10-year Treasury yield

TMUBMUSD10Y, -1.89%

also fell to a fresh low of 2.16%. The yield has retreated from a seven-year high of 3.23% last October.

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“The Simple Path to Wealth” blog

A small house in Montgomery, Alabama.

Rates for home loans fell again, taking the benchmark product below a key threshold, as global economic concerns rocked markets.

The 30-year fixed-rate mortgage averaged 3.99% in the May 30 week, down from 4.06%, Freddie Mac said Thursday. That marked a 16-month low for the popular product, which has eked out a weekly rise only six times so far in 2019.

The 15-year fixed-rate mortgage averaged 3.46%, down from 3.51%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.60%, down 8 basis points.

Rates have tumbled for the past few weeks, in line with the broader bond market, on concerns about a U.S.-China trade war and overall slowing global growth. When investors grow worried about future growth, fixed-income assets like bonds look more attractive, and when bond prices rise, yields fall. Fixed-rate mortgages follow the 10-year U.S. Treasury note

TMUBMUSD10Y, -1.89%

 .

See: Sell your home with a Realtor or an algorithm? Maybe both.

But Americans aren’t taking advantage of the rate lull the way they may have been expected to. Mortgage applications for both purchases and refinances fell in the most recent week, the Mortgage Bankers Association said Wednesday.

“It is possible that the trade dispute is causing potential homeowners to hold off on buying, with the fear that further escalation – or the lack of resolution – may have adverse impacts on the economy and housing market,” the group said in a release.

All eyes are on the crucial spring selling season, in hopes that sales activity will shed more light on the health of the market. Many analysts believed that the market wobble in the second half of 2018 was a one-off, and with rates backing off, more Americans would be lured back into the market. That may turn out to be too optimistic.

Read: We’re probably at peak housing. Here’s what that means.

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Run for the hills.

That seems to be summing up the investor mood Friday after President Donald Trump shocked markets with a tweet promising tariffs on all Mexican imports until the illegal migrant situation is sorted. The likelihood of one more trade battlefield opening up means pretty much any asset associated with risk, notably equities, is taking a hit.

And while thoughts of scant avocado or tequila supplies may be on your mind, don’t forget that Mexico tariffs can impact big car makers, which have moved some production there — shares of Ford

F, +0.31%

 and GM

GM, +0.09%

  are under pressure. Meanwhile, some are worried Europe may be next in line for tariffs, and those markets are also down sharply. tweak on this graph

Elsewhere are reports Beijing may be readying its own retaliatory measures against a U.S. crackdown on tech giant Huawei Technologies. And China manufacturing data had a poor showing for May, thanks to U.S. trade tensions.

To be sure, May is drawing to a close with a clang for investors. The S&P 500 is facing a more than 5% loss for the month, which brings us to our chart of the day, from Joel Kruger, currency strategist at LMAX Exchange. His chart spells out the possibility that stocks will revisit levels not seen since the December meltdown.

Kruger is specifically is looking at the 2,340 reached in December 24 which was the lowest level seen for the S&P 500 in the last two years — and revisiting that level would mean a 16% drop from Thursday’s close.

He says investors need to face up to the fact that by now, any benefits from already depleted easy central bank and government stimulus could be offset by new negative shocks to the global economy, Kruger told MarketWatch in emailed comments.

Check out his S&P 500 monthly chart:

Joel Kruger, LMAX Exchange

He says the S&P 500 is facing what he calls an “ugly reversal month,” meaning that May started with a push to a fresh record high, but has ended with the S&P 500 coming all the way back down and breaking past a low seen in April. ”It’s an ugly picture when you go higher and then can’t do anything with it,” and then take out the previous monthly low, he says.

“This reversal introduces the prospect for a deeper drop over the coming weeks, easily capable of retesting the December 2018 low,” he says.”

“Overall, we remain skeptical the equity market will be able to keep doing what it’s done over the past decade, which is to find support at every dip for a run to fresh record highs,” he said.

The market

Dow

YMM19, -1.01%

  , S&P 500

ESM19, -1.05%

   and Nasdaq

NQM19, -1.30%

   futures are deep in the red. More coverage in Market Snapshot.

The Mexican peso

USDMXN, +2.7223%

is down 3% against the dollar, which itself is sliding versus the yen

USDJPY, -0.75%

 . Investors are piling into bonds, with the yield on the 10-year

TMUBMUSD10Y, -2.63%

 and gold

GCQ19, +0.70%

 climbing. Oil prices

CLN19, -1.63%

 are down after hitting March lows.

Europe stocks

SXXP, -1.22%

are off sharply led by the auto-heavy German stock index

DAX, -1.68%

Asian equities finished mixed, with yen gains hitting the Nikkei

NIK, -1.63%

 , but China stocks

SHCOMP, -0.24%

 off modestly.

The call

Investors are getting more negative on stocks, but “not bearish enough to trigger contrarian buy signals,” says Bank of America Merrill Lynch in our call of the day.

A contrarian strategy dictates that the time to buy an asset is when everyone really starts selling. It echoes a famous quote from billionaire investor and Berkshire

BRK.A, +0.34%

BRK.B, +0.61%

 chairman Warren Buffett which refers to being “fearful when others are greedy and to be greedy only when others are fearful.”

The bank’s indicator shown below is the green-and-red investor sentiment scale below, with an arrow in the middle that swings from 1 to 10 — extreme bear to extreme bull. The bank advises selling when sentiment is above 8, and buying when it drops below 2.


The economy

Personal income, consumer spending and core inflation data are all ahead of the open, followed by the Chicago purchasing managers index and the consumer sentiment index. Data preview here.

The buzz

Trump says Mexico tariffs will rise 5% as of June 10, and go up every month until reaching 25% on October 1, until that country halts the flow of migrants over the border. Mexican President Andrés Manuel López Obrador, said in a public letter to Trump that “social problems are not solved with duties or coercive measures” and asked for a meeting on Friday between negotiators from both countries.

From Beijing. Hu Xijin, editor in chief of China’s Global Times, a tabloid with ties to the Communist Party, hinted officials are making retaliatory plans: “Based on what I know, China will take major retaliative measures against the U.S. placing Huawei and other Chinese companies on Entity List. This move indicates Beijing will not wait passively and more countermeasures will follow.”

Bloomberg reported Beijing has a ready-to-implement plan to curb exports of rare earth materials to the U.S., focusing on a sub sector used in cars and most consumer goods that the U.S. needs the most.

Meanwhile, Vice President Mike Pence is reportedly planning a speech that will come down hard on China over human rights, possibly in mid June.

And North Korea has reportedly executed officials tied to February’s failed summit between Trump and the country’s dictator Kim Jong Un, while his right-hand man Kim Yong-chol is apparently doing hard labor.

Amazon

AMZN, -0.16%

 may buy prepaid wireless service Boost Mobile from T-Mobile U.S.

TMUS, -0.13%

 and Sprint

S, +5.29%

 , Reuters reports.

Shares of Uber

UBER, -0.35%

 , which reported a roughly $1 billion loss in the first set of earnings since its IPO, are jumping as executives say a price war with rival Lyft over ride-hailing fares is calming down.

Gap

GPS, -1.10%

 shares are getting hammered after executives spoke of an “extremely challenging” first quarter and the retailer missed Wall Street’s profit and sales expectations.

Facebook

FB, +0.45%

 CEO Mark Zuckerberg has a lot to say about wanting more regulation and promises to protect the privacy of users, but he has yet to really convince investors, says MarketWatch’s Therese Poletti.

The quote

“Tear down walls of ignorance and narrow mindedness for nothing has to stay as it is.” — That was German Chancellor Angela Merkel who got a standing ovation after her Harvard University in a commencement speech Thursday.

“Tear down the walls of ignorance and narrow-mindedness for nothing has to stay as it is,” Chancellor Angela Merkel #Harvard19 pic.twitter.com/rcL68ol0th

— Harvard Alumni Association (@HarvardAlumni) May 30, 2019

Random reads

Texas Sen. Ted Cruz and Rep. Alexandria Ocasio-Cortez have weirdly found common ground

U.S. rap sensation Drake up to his NBA courtside antics again

Drake called Dray “trash” immediately after the Raptors won Game 1 😳 pic.twitter.com/vJluvzUCFa

— Bleacher Report (@BleacherReport) May 31, 2019

Liverpool fans lead the singing in Madrid as UEFA championship festivities kick off

1am here in Madrid and a fair few hundred Liverpool fans still in Plaza Mayor giving Allez Allez Allez a run out…it’ll be thousands strong here this time tomorrow night 🔴⚽️ pic.twitter.com/eiruagraBY

— Radio City News (@RadioCityNews) May 30, 2019

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