This week felt subdued compared to last week when the trade war rhetoric escalated fiercely. Things were calmer and even the G-7 meeting in France was relatively quiet. We also had the Fed Chair speaking at the annual Jackson Hole conference, commenting on global growth and how the Fed will remain supportive of the economic expansion. Articles on those topics as well as on the Portsmouth craft brewery scene, how the Nordic socialist economic model may not be what it seems, thoughts on the future of yields and inflation, how the trade war has affected tourism, and how a Scottish castle can be yours!
Enjoy this week's The Friday Buzz. Have a great Labor Day Weekend!
- Jackson Hole Fed Comments: Jerome Powell, the Federal Reserve Chair, made his annual comments last Friday at the Jackson Hole conference. He stated the global economy has been deteriorating, he would act to extend the expansion, and, referring to trade wars, that the Fed may have to look past short-term developments when it came to policy. CNBC
- The 2019 G-7 Summit: The Group of Seven Economic Summit ended earlier this week in France. The week leading up to the summit was contentious between the U.S. and China with new trade sanctions and escalating rhetoric every day. So the most noteworthy news about the summit is that nothing crazy happened, even after President Macron of France brought in Iran's Foreign Minister unbeknownst to President Trump and the other attendees. Euronews NYT
- This Week's Trade War Temperature – Cooler: After last week's raucous back and forth escalation, this week the U.S. and China cooled the trade rhetoric. For more information, click the link for a timeline of events for the 18 month-old trade war, or read any of the previous 78 RSWA weekly emails as we pretty much have to report on it every week… Business Insider
- Portsmouth Craft Beers: One thing we have learned about our clients and friends is that they love good food and drink. It is no coincidence that our biggest events this year were the Wentworth Winter Wine Festival and the DiMillo's Lobster Bake! Also, our articles referencing restaurants, wine, and beer are some of the most popular links with readers. So with that in mind, here is a list of the booming craft breweries in the Portsmouth area. (I'm just feeding the beast - pun intended! 😊). Go Portsmouth
- The Success of the Nordic Socialist Model Looks Like… The U.S. Economic Model? According to Swedish author and historian, Johan Norberg, the Swedish social model only works because it is supported by ruthless capitalism. He states Sweden's foray into socialism in the 1970's and 80's led to slower growth, lower employment, and a falling standard of living. Only when lower taxes, deregulation, and free-market principles were reintroduced in the early 90's did the economy start growing again. He also debunks the myths that Sweden only heavily taxes the rich and it has national healthcare. His advice for America - stick with free markets. WSJ
- The Possible Future of Inflation and Bond Yields: I was in NYC this week and stopped by BlackRock to speak with a fixed income market strategist. They think we may be in the middle of a seismic shift in bond yields and inflation and it's possible for the foreseeable future that it may be harder for bond yields to move higher than move lower. There is also the chance that over the next couple of decades, central banks will be trying to push inflation higher, as opposed to the last four decades when they were working to keep inflation lower. The theory is that there will be a lot of demand for income with aging demographics across the globe, and technological developments will continue to keep a lid on inflation. Bonds will still protect a portfolio during poor stock markets, and so despite BlackRock's prediction of lower future yields, this does not change our current view that bonds belong in a well-diversified portfolio.
- Less Tourists Hurt Earnings: Retailer Macy's lowered their forecast for earnings. One of the biggest reasons were fewer tourists at their flagship New York store. Tourism is down due to the strong dollar and the ongoing trade war between the U.S. and China. A trade war can have ripple effects that aren't always obvious, and hurting tourism may be one of the less obvious ones. Reuters
- Live Like a King or Queen in a Scottish Castle! Ever dream of owning a castle? Well, the historic Seton Castle, which has links to Mary Queen of Scots, is now on the market. It has a wine cellar, helipad, and cinema, to go along with curved walls and secret staircases. Unfortunately, it will cost you about $10M. Nonetheless, the pictures are beautiful. Makes me think of the upcoming NH Scottish Highland Games, one of the biggest in the U.S. - my family and I go almost every year and it is a blast! House Beautiful NH Scots
Thank you for reading The Friday Buzz. Enjoy the long weekend!