Despite trade concerns the Dow and S&P have a strong week.
President Trump hit China with another set of tariffs. This time the President ordered a 10% tariff on $200 billion of additional Chinese goods. But Trump warned his latest tariff could rise form 10% up to 25% by the end of this year. China responded with a 5-10% tariff on $60 billion U.S. goods. In truth, a real trade war with China wouldn’t be good for either country. China has taken advantage of the U.S. for decades. President Trump is trying to get our country a better deal. China doesn’t want to give in and is trying to save face. For now my questions is: Who will blink first?
Housing news: Housing starts were up +9.2% in August; up +9.4% year-over-year. Existing home sales were unchanged in August; down -1.5% year-over year.
The economic focus of the week: It will come on Wednesday afternoon when the Federal Reserve’s Open Market Committee (FOMC) meeting statement is released. The FOMC meets eight time/year; this being the sixth time. The results of this meeting, which takes place this Tuesday and Wednesday, is expected to see the Fed’s interest rate rise another ¼ point. If that takes place, the Fed’s rate will move from +1.75% up to +2.0%.
The final Q2 GDP number will be released on Thursday morning. The current reading is at +4.2%. It’s possible that could remain or it could rise a tick up to +4.3%. The number gets released at 8:30am. Either way, the rolling 4-quarter average will remain over +3.0%.
Indicator focus: September’s consumer confidence number, July’s Case-Shiller home price index (Tue); FOMC meeting announcement, the Fed Chair press conference (Wed); August’s durable goods and international trade numbers, the final Q2 GDP number (Thu); and September’s final consumer sentiment number (Fri).
Hope you have a great week.
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