November 1, 2019
How Will Ongoing China Trade Tensions Tensions Impact Consumer Spending? thumbnail

How Will Ongoing China Trade Tensions Tensions Impact Consumer Spending?

According to the U.S. Department of Commerce and the U.S. Census Bureau, retail sales came in at a negative 0.3 percent for September, even though it’s still 4.1 percent more than September 2018’s report. The same report followed up on August 2019’s numbers, with a revision by the agency to 0.6 percent, up from 0.4 percent. With the ongoing U.S.-China trade war and tariff uncertainty, how will consumer spending be impacted? Current State of Trade and Tariffs With phase one agreed to, at least in principle, at the end of the meeting with Chinese Vice Premier Liu on Oct. 11, President Trump agreed to keep tariffs at 25 percent on $250 billion in Chinese imports, instead of increasing the tariffs […]
October 1, 2019
Will China's Recent Soybean Purchase Begin Thawing the Trade War? thumbnail

Will China’s Recent Soybean Purchase Begin Thawing the Trade War?

With the United States Department of Agriculture’s Foreign Agriculture Service announcing a purchase of 204,000 metric tons of U.S. soybeans by private Chinese importers, there are hopes that the trade war is beginning to dissipate. Seeing that the last significant purchase of U.S. soybeans by China was in June, professional traders see the September acquisitions as a potential weakening of the U.S.-China trade war. With the USDA’s Foreign Agricultural Service announcing more than 600,000 tons of U.S. soybeans purchased by private Chinese operators on Sept. 13, 16 and 17, there are signs of positive movement between the two nations. The shipments are expected to leave between October and December from ports in the Pacific Northwest. Looking at the Chicago Mercantile […]
September 1, 2019
How Will Tariff Developments Impact the Stock Market Going Forward? thumbnail

How Will Tariff Developments Impact the Stock Market Going Forward?

According to an Aug. 13 press release from the office of the United States Trade Representative (USTR), there will be a 10 percent tariff levied against $300 billion of Chinese imports effective Sept. 1. The same press release announced a modification, after hearing from the public and business owners, exempting some of the $300 billion in Chinese imports from the 10 percent tariff until Dec. 15. Items Subject to the 10 Percent Tariff on Sept. 1 Highlights from the USTR’s list include select types of coffee, fruit, vegetables, insects and bees. Along with dairy products, livestock such as sheep, horses and goats are subject to the 10 percent tariff. Items Subject to the 10 Percent Tariff on Dec. 15 The […]
August 1, 2019
How Will the July 17, 2019 Beige Book Impact the Economy? thumbnail

How Will the July 17, 2019 Beige Book Impact the Economy?

The Federal Open Market Committee (FOMC) recently met at the close of July, bringing to light many questions on the Federal Reserve’s future monetary policy. While there was much speculation that the Fed would lower the federal funds rate at its most recent meeting, there are many factors impacting this decision. One relevant factor is the Beige Book. Understanding what the Beige Book is and how it’s factored into the FOMC’s decisions gives us a better understanding of our economy.    What is the Beige Book? According to the Board of Governors of the Federal Reserve System, one survey of the U.S. economy is done through the Beige Book. Put out by the Fed eight times annually, it aggregates economic […]
July 1, 2019
How Increased Tariffs on Chinese Goods Will Impact Market Earnings thumbnail

How Increased Tariffs on Chinese Goods Will Impact Market Earnings

With the Office of the U.S. Trade Representative announcing the increase of tariffs on imported Chinese goods from 10 percent to 25 percent on $200 billion worth of goods, and a directive from the executive branch to increase tariffs on an additional $300 billion in Chinese goods, how will publicly traded companies’ earnings be impacted? According to a May 10 press release from the office of the United States Trade Representative (USTR), tariffs of 10 percent on imported Chinese goods, consisting of $200 billion, increased to 25 percent. The press release also indicated that the remaining amount of Chinese imports, about $300 billion, will now be subject to tariffs. Based on a June 14 USTR press release, hearings on implementation […]
June 1, 2019
How Will Increased Business Productivity Impact Business Earnings Reports? thumbnail

How Will Increased Business Productivity Impact Business Earnings Reports?

During the first three months of 2019, non-farm labor productivity grew 3.6 percent, according to the U.S. Bureau of Labor Statistics. This is coupled with a 4.1 percent increase in output, along with hours worked increasing by one-half of one percent. Comparing the rates from 2019’s Q1 to the first three months of 2018, productivity grew by 2.4 percent, year over year. Looking at the trend over 12 months, the BLS reported a 3.9 percent uptick in output and a 1.5 percent uptick in hours worked.  With the BLS defining the non-farm business sector accounting for nearly four-fifths (77 percent) of America’s gross domestic product, it’s still noteworthy to see what it doesn’t include. It doesn’t account for government entities, […]
May 1, 2019
CPI and Consumer Spending: How Will It Affect Stocks in 2019? thumbnail

CPI and Consumer Spending: How Will It Affect Stocks in 2019?

With the price of lettuce increasing by 15 percent over the past 12 months at the end of February, and television prices dropping 17 percent during the same period, according to the Bureau of Labor Statistics, these statistics show the dynamism of consumer goods. Since consumer spending continues to make up approximately two-thirds of the U.S. economy, according to the St. Louis Fed, understanding how it impacts company earnings and future stock market movements is essential. Surveying Consumer Spending Based on the March 29 Bureau of Economic Analysis (BEA) release, consumers are facing more financial pressure. For the month of January, individual income fell by one-tenth of 1 percent, or $22.9 billion. The same month saw disposable personal income, or […]
April 1, 2019
What is the Forecast for Job Creation in 2019? thumbnail

What is the Forecast for Job Creation in 2019?

According to a March 12, 2019 publication of the Bureau of Labor Statistics’ TED: The Economics Daily, the February employment report did not report show a lot of jobs for the U.S. economy. Based on the report and averaging all sectors, only 20,000 jobs were gained during February 2019. Looking deeper at the individual sectors, the picture is more varied. “Professional and business services gained ” 42,000 jobs during February. Similarly, “wholesale trade employment” maintained it’s positive gains of 11,000 jobs during the same time-frame. However, the construction industry saw a loss of 31,000 jobs during February, despite gaining 53,000 jobs during in January 2019. Other sectors, such as retail, mining and the government, saw limited movement in job gains […]
March 1, 2019
Understanding Targeted Longer-Term Refinancing Operations thumbnail

Understanding Targeted Longer-Term Refinancing Operations

With speculation of a third round of Targeted Longer-Term Refinancing Operations (TLTROs), understanding how they’ve been implemented and how they’ve performed is essential to see just how this program might be extended. According to the European Central Bank, TLTROs “are Euro system operations that provide financing to credit institutions for periods of up to four years.” Their purpose, according to the ECB, is to help European countries’ banks provide more lending to all segments of the economy. TLTRO Origins As a reaction to the sovereign debt crisis, the ECB created the TLTRO program to help increase liquidity and reduce the chances of European sovereign debt defaults. One notable takeaway of the proposal for TLTRO III is to base the interest rate […]
February 1, 2019
How Will Domestic and Global Policy Impact Oil Prices in 2019? thumbnail

How Will Domestic and Global Policy Impact Oil Prices in 2019?

With the Federal Reserve raising rates in 2018 and speculation of doing so again in 2019, combined with projected oil production cuts by Russia and Saudi Arabia, it is likely that these and other global events will impact world energy markets in 2019. Looking at how international markets have priced crude oil in 2018’s fourth quarter, there’s a lot to speculate on where prices will go in 2019. During the final quarter of 2018, oil prices hit a 48-month high of $86 per barrel. Yet, by the end of December, the price of a barrel of oil lost almost one-third of its value, settling under $50 per barrel. Since the global economy is so volatile and is forecast to continue […]
January 1, 2019
How Will the 90-Day Freeze on Tariff Increases Impact the Markets? thumbnail

How Will the 90-Day Freeze on Tariff Increases Impact the Markets?

According to a press release issued by the United States Trade Representative (USTR) in the middle of September, tariffs of 10 percent on $200 billion of imported Chinese goods went into effect on Sept. 24, 2018. The same tariffs, according to the press release, were set to increase to 25 percent on the same $200 billion in Chinese imports on Jan. 1, 2019.    However, after talks between the leaders of the United States and China during G20 meetings in Buenos Aires, Argentina, the United States agreed to freeze tariffs at the 10 percent rate for 90 days starting Dec. 1, 2018. If the negotiations don’t lead to long-term settlements, the tariffs will increase to 25 percent on March 1, […]
December 1, 2018

Will the United States Become a Bond Haven in 2019?

With Italian bond yields rising quickly from 2 percent to 3 percent since the middle of 2018, it begs the question if the United States will become a bond haven. There are many reasons why the United States Bond Market has the potential to became a refuge for many global investors. According to a 2016 paper from the National Bureau of Economic Research, safety is in the eye of the beholder – in the case of the global markets, it’s the investor. When there are global economic worries, the paper credits a “nowhere else to go” theory for investors that choose U.S. debt versus others. Along with a country’s ability to handle its own debt, the National Bureau of Economic […]
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