Daily Market Color

Trade Uncertainty Continues to Restrict Risk Assets


Trump Takes a Bite Out of Apple

As the queue of threatened tariffs on Chinese imports continues to build, so does the concern from American companies who stand to be negatively impacted by the trade war.  This weekend Apple Inc. was thrust into the spotlight after the tech-giant submitted comments for the first time to the U.S. Trade Representative, outlining the negative impact to be caused by the tariff battle on many of its major products.  President Trump took to Twitter to offer his solution to the problem…
Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting!



Shares of Apple declined 1.34% during today’s session following the news, however major indices finished mixed with Nasdaq (+0.27%) and S&P 500 (+0.19%) finishing in the black while the DJIA lost 0.23%.  US Treasurys held within a tight range as the selloff following last week’s jobs data tapered off with the continued concern in trade disputes.  The yield on the 10-year note closed today at 2.93%, just below its yield at the end of last week.  In commodity markets, WTI crude oil futures settled 0.28% lower to $67.56/barrel as investors saw offsetting impact from the prospects of increased supply in the US vs. the threat of Iran sanctions.



The Week Ahead

In last Friday’s employment report, we learned that wage growth had finally began to kick into a higher gear.  Later this week, financial markets will turn their focus to the Labor Department’s inflation metrics to try to confirm a corresponding acceleration in consumer prices.  The core inflation rate has held above 2.0% YoY for the past five months, and that figure is expected to remain at 2.4% for August.  Consumer spending trends will get further revealed with Friday’s release of retail sales data, where another robust month of purchases at retailers (+0.4%) is expected.  Overall, this week’s economic data will help to provide the Fed with further evidence to support its projected path of rate hikes over the next 1-2 years.  In an interview over the weekend, Boston Fed President Eric Rosengren hinted that the recent strength in the economy may align with a tighter policy than currently priced in by bond markets — “It would not surprise me at all if the committee estimates … go up over time,” which he stated would “expect the path (of tightenings) to move as well”.


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