Issue: President Trump will raise tariffs on remaining $300 billion of Chinese imports.
Implication: This is the first set of tariffs on consumer goods. Expect prices to increase on T.V.s, toys, apparel, and more.
Issue: Federal Reserve cut interest rates ¼ % as widely expected.
Implication: When we do enter recession (many thinking 2020) the Fed may not be able to lower rates much further to stimulate the economy.
Issue: China is devaluing their currency
Implication: The products for U.S. businesses selling into China will see price increases. China will have less interest in buying U.S. Treasury Bonds. That’s a big deal because they are the largest buyer of Treasuries outside of the U.S. Government.
Issue: U.S. Employment Report
The jobs report released on Friday indicated a solid rise of 164,000 jobs in July with an unemployment rate of 3.7%.
Implication: Just about anyone who wants to work is, or can work, in this economy. Curiously there is very little wage inflation which has economists somewhat perplexed.
Issue: U.S. Auto sales slowing
At the midway point in the year sales were down 2.4%.
Implication: Lots are full so prices and financing rates are likely to come down. This fall will be a great time to score a deal on that new vehicle you’ve been eying.
Issue: U.S. Stock Market in deep dive today (8/5).
Implication: Trade tensions are rising rapidly after subpar talks last week. It’s unlikely U.S. agricultural products will see a pickup in sales to China. It’s a game of chicken between the world’s two largest economies. Who will blink first?
Here’s to a profitable week (or at least a not too painful one)!
Ron
