Trade concerns continue, despite stronger-than-expected earnings results, to cast a shadow over the equity and bond markets. Last Thursday, President Trump, dissatisfied with trade negotiations, threatened to implement a 10% tariff on September 1st for the remaining $300 billion of Chinese exports not already subject to tariffs. The markets immediately sold off on fears that an expansion of trade tariffs with China would further damage the U.S. economy. Last week, Nasdaq declined 3.92%; S… View More
With two dissents, the FOMC cut the fed funds rate -25bp today. This does not have to be the start of a “long” series of rate cuts according to Fed Chair Powell, but some additional action is still possible. Lower neutral interest rate assessments, global risk, and still-too-low U.S. inflation were mentioned as key factors for cutting rates today, despite the recent stronger-than-expected GDP and jobs reports. The statement included: “[i]n light of the implications of global developme… View More
A cottage industry has sprung up in the past decade with the sole focus of discrediting any good news on the economy. When President Obama was in office, the attacks mostly came from the right. With Presi dent Trump in Office, the attacks mostly come from the left. Since March 2009, regardless of who was in office, we have stridently argued that this recovery has legs. The latest debate is over real (inflation-adjusted) GDP, which grew at a better than expected 2.1% annual rate in Q2. Some s… View More
If the temperature along the East coast this weekend wasn’t a reminder, with the dog days of summer also comes a shift in the market’s seasonal bias. Ultimately, seasonality is a small consideration in our thinking, but it’s helpful in determining when to press or when to play more patiently. With internal momentum starting to contract, we suspect the latter approach may prove prudent over coming weeks. Whether it’s a market consolidation marked more in time or price is unknown, … View More
The equity markets treaded water for much of the week due to uncertainties related to the impact of last Friday’s strong jobs report on a potential rate cut. On Thursday, the markets rose following Federal Reserve Chairman Powell’s Congressional testimony. In describing the economy as “in a very good place,” he added that his main worry relates to global growth and that many Fed members “have come to the view that a somewhat more accommodative monetary policy may be appropriate.”… View More