Investment Insights & News

Speaking on Money 08/05/2019

Ron Gambassi
August 5, 2019

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)!


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