Trade Wars – Tit-for-Tat Retaliation - August 7, 2019

The U.S. ratchets up trade tensions by slapping a 10% levy on the final $300 billion in Chinese imports. China retaliates by weakening its currency.

The early read—the heightened uncertainty takes a toll on stocks.

Unlike prior barriers, the latest Chinese tariffs, which take effect September 1, hits mostly consumer goods.

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A Rate Cut in an Expanding Economy - August 2, 2019

The economy is expanding, consumer spending and consumer confidence are strong, job growth is respectable, layoffs are low, and the Federal Reserve just cut the fed funds rate by a ¼% to 2.00-2.25% – see Figure 1.

It was a well-telegraphed rate cut. Only the magnitude of the cut was in question.

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The Fed – Tapping on the Accelerator - July 30, 2019

The Fed will announce its rate decision on Wednesday.

  • A rate cut is virtually assured.
  • Most observers anticipate a 0.25 percentage-point cut in the fed funds rate to 2.00-2.25%. A few see 0.50 percentage points.

A reduction of ¼% will likely have little impact on investors as it’s priced in. How the Fed frames its outlook is in view.

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Slower Growth but Not a Slow Economy - July 29, 2019

The U.S. Bureau of Economic Analysis reported that Gross Domestic Product (GDP), the largest measure of U.S. economic activity, slowed from Q1’s annualized pace of 3.1% to a still-respectable 2.1% in the second quarter.

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