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Seven Key Economic Indicators, Getting It Strait, Bon Appetit’s Love Affair With Maine (and More!)

The addition of 224,000 new jobs in June confirmed that the U.S. economy continues to grow. Slowing manufacturing is a concern, with trade conflicts taking a toll. Might President Trump have to choose between continuing to wage tariff wars and being a one-term president? The next Federal Reserve interest rate decision meeting occurs at the end of this month. The markets expect a rate cut of at least 0.25%, but it may not be a given. Expect market tension to build, as we near that meeting.

These Notes include several useful planning and informative lifestyle articles too. Personal favorites include the note on coffee as “superfood” and the article on a “going like gangbusters” Portland/Miami startup led by a former RSWA employee. Read on and enjoy.

  • Seven Economic Indicators: This excellent article summarizes some mixed economic indicators. Four indicators are positive “green lights” (i.e., truck sales, jobless claims, temporary hires, and bank lending). One is a cautionary “yellow flag” (i.e., business spending). One is a “yellow to red flag” (i.e., trucking), and one is a concerning “red flag” (i.e., manufacturing). Washington Post

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Int'l Tensions Seesaw, Social Security Research, Americana Trivia, and Winning Golf!

After this past weekend, President Trump had to be very pleased.  He jump started the stalled trade talks with China at the G-20 summit, and he was the first President to step foot in North Korea, at a meeting that restarted the nuclear negotiations with the isolated nation.  The news about the trip was positive and the stock markets (already close to highs) rallied Monday and the S&P 500 hit a new high with upward momentum continuing through mid-week. 

Yet the weekend had the feeling that we've all been here before, like entering a maze and wandering around for a while, only to discover you were right back where you started.  Though the weekend provided great photo ops and renewed optimism for restarting negotiations around two thorny international issues, we are no further along to resolving them than we were months ago.  And in the background, the Iranians admitted to breaking the terms of their accord for uranium enrichment, and just like that the weekend developments seem so-so.  All three international issues are complex, have some very intractable components, and will take months, if not years, to resolve – if they are resolved.  But we will continue to watch and comment on them for their impact on the markets and economy as we work our way through the maze.

On the lighter side and in honor of the Fourth of July, there are Americana articles and trivia sprinkled throughout this week's edition.  Can you get all the trivia correct (without using Google!)?  Answers are at the end – have fun and let me know how you do!  There are also articles on social security, data showing the U.S. economy is decelerating (but still expanding), and a RSWA winning golf team!  All this and more in this week's The Friday Buzz.  Enjoy and have a very Happy Fourth of July weekend! 

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High Stakes International Poker, Taxing Billionaires, Fed Intrigue (and More!)

One cannot underestimate the immense gravity of the conflicts with China and Iran, so we start with what we believe is an incisive article on those two conflicts. Watching the Fed is starting to feel like a sophisticated financial soap opera, but hey it’s our job! For the first time, we are starting to think that the idea of a wealth tax could get some traction and explain why.

Please click on Read More below so that you don’t miss some of the most interesting notes. “I Got This!” is my favorite, an inspirational story of a young golfer with a can-do attitude. Non-golfers may love it as well. We also touch on other topics like proposals to cancel student debt, important new research about the Mediterranean Diet, the surprising link between coffee and migration, more on Facebook’s proposed cryptocurrency, opportunity zones in Maine, and a concerning article about digital privacy and internet browsers. To the links!

  • Trump Takes on China and Persia: The U.S. is clashing with two ancient civilizations at once with much at stake. Thomas Friedman offers his perspective. His tone may be overly caustic for some, but the piece is well worth reading for the insights. New York Times

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Fed Cuts Soon? Rethinking Retirement, and Traveling to Change Your Life!

The Federal Reserve met this week amid the release of spotty economic numbers this month and hinted at a potential future rate cut.  In the last couple of weeks, the Fed has stated it will act as appropriate to sustain the economic expansion, and all eyes will be on their July meeting.  Meanwhile, tensions are rising with Iran as the U.S. sends more troops to the region.  But for now, the stock market shrugged off those concerns and focused on the positive Fed comments and climbed close to all-time highs.  Also this month, articles on rethinking retirement, mysterious gold, and more in this week's The Friday Buzz.  Enjoy! 

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Weaponizing Tariffs, The Fed and Preemptive Strikes, Best Places (and More!)

The U.S. recently threatened Mexico with new tariffs unless it did more to stem the tide of immigrants coming from Central America. This “weaponizing” of tariffs for policy ends spooked many, including economists, investors and the Republican controlled Senate. Mexico apparently agreed to do something, taking tariffs off the table temporarily. Meanwhile, the Fed is preparing to leap into the breach, signaling its willingness to cut short term rates in an effort to boost the economy. Apart from these weightier topics, we have informative and fun notes on various topics like “best places” to live, breakthroughs in Alzheimer’s research, a travel advisory, craft chocolate and even a diet book (to offset the chocolate article?). The anti-trust and big technology note is wonkier but has important perhaps crucial implications.

  • Weaponizing Tariffs a Risky Game? Using the threat of tariffs to force Mexico to step up its efforts to help manage the immigrant crisis may have succeeded. The details of any commitments have not been disclosed yet. But this type of pressure is potentially and materially disruptive to the economy of the countries involved and makes it difficult, if not impossible, for companies involved with trade to plan.  CNBC

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Tariffs Taking Hold, Who is Alex?, and How to Host a Wine Party

The U.S. and world economy has been shrugging off the effects of tariffs for over a year.  But no more. This week's first three economic articles highlight the fact that tariffs, and trade barriers are finally having a significant impact on economic growth.  Economies are still growing.  They just feel like they are bogging down.  Articles on that and more in this week's The Friday Buzz.  Enjoy! 

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A New Cold War, Huawei, “The Secure Act”, Fine Dining in Portland (and More!)

Some pundits have begun claiming that we are in a cold war with China. Terminology aside, it is an open, high stakes competition for global economic dominance. In this context, it is worth taking the time to learn about why Huawei, the Chinese telecom company, matters so much. We also have an update about important retirement plan legislation (the so-called “Secure Act”). If time permits, I encourage readers to sample some of the Notes that touch on topics that speak to well-being and quality of life. My personal favorite? That would have to be the article about Frances Arnold, the scientist extraordinaire!

  • Walling Off Huawei? Huawei is now the world’s second-largest cell-phone maker after Samsung. It, and other Chinese telecom companies, control roughly half of the networks for global internet traffic. This control gives it immense clout to spy on global communications or even to shut important communications down completely. President Trump wants to “wall it off” and, in effect, create two Internets. NYT

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Foreign Policy, Budget Talks, and Americans are Moving to Mexico in Droves!

The beat goes on with U.S. – China tariffs with high stakes moves to prod concessions, but foreign policy issues are now crowding the headlines.  As tensions with Iran go back and forth, there's a belief the foreign hotspots are here to stay as top news.  All those articles and more!

Also, it's Memorial Day weekend, a time to pause and remember those who died in active service to our country.  And it is the unofficial start of summer, so hopefully there will be plenty of sun for everyone.

Enjoy The Friday Buzz and please forward to anyone who may have interest.  Have a great Memorial Day weekend!

  • The White House Preparing More Pressure on China:  President Trump aims to keep the heat on China and create trade concessions.  After blacklisting high profile Chinese company Huawei from U.S. trade due to security concerns the administration is looking at targeting other Chinese companies.  Despite periodic reports and Tweets to the contrary, there are no signs of the trade war abating.  Making a deal makes the most sense for both sides, but China has to realize the days of cheating and stealing of technology are over, as pointed out in this opinion piece by Thomas Friedman.

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Time to Get “Real” About China, Iran, CBD, Longevity and Happiness Insights

Barring the unexpected, a trade deal with China is not imminent. Investors should prepare for escalating tariffs and heightened stock market volatility, as the market re-prices the risks to the currently strong U.S. economy. We advise ignoring tweets, anonymous reports, rumors and speculative news stories with a short- term focus. The context of the tariff conflict is that of a geopolitical high stakes struggle between the U.S. and China, making it challenging to find acceptable common ground.

Meanwhile, the Middle East is heating up to a near boiling point. Military skirmishes, if not all out war, involving Iran, the U.S. and our respective regional allies, are real possibilities. We also came across some fascinating articles on various topics relating to health, longevity and happiness. The long article on the medicinal potential of CBD is the best I have read. Lastly, please let us know if you have any specific areas of interest. A client asked about leasing vs buying a car, and we discovered an article that might benefit many clients and friends. Delighted to oblige.

  • A Long and Painful Trade War? Perspective on the China trade conflict has been in short supply. This article by Neil Irwin, one of my go-to writers on complex economic topics, does an excellent job explaining why there is no easy fix. New York Times Ray Dalio, the legendary hedge fund investor, explains that it is an ideological war. LinkedIn

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China Trade Conflict Takes Center Stage (and More!)

On the financial front, the buzz is all about China. Rumors are swirling that China has attempted a major retreat in the negotiation process, causing President Trump to threaten to impose large tariff increases, effective this Friday, coincident with the arrival of a China trade delegation. The markets are flip flopping (most flopping) on every China trade headline and gamesmanship ploy. We will pick up on the China trade story in next week’s Coffee Notes.

Please read on for more notes on the economy, the Fed and some terrific success stories about a small high school in Maine and a local Maine brewery that has won national recognition. 

  • China Trade Deal Near? High stakes negotiating tactics may ultimately work, but it’s “agita” for the stock market. Trump claimed this morning that China’s vice-premier is coming to the U.S. to make a deal. (CNBC) This comes on the heels of a report that China is attempting to re-negotiate previous positions. (CNBC)

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