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)
- Fed Walking a Tightrope? I don’t envy Jerome Powell, Fed Reserve Chairman. President Trump is all over him, and he’s attempting a balancing act on interest rates in a “Goldilocks” economy. He is getting better at communication. (MarketWatch)
- Yield Curve Losing Its Predictive Power? It could be. With inflation and global interest rates so low, some economists and market strategists believe that the yield curve is losing its recession predicting power. (Bloomberg)
- The Surprising Economy: The economy is better than many predicted. Do new “rules” apply? (New York Times)
- Wages Are Finally Rising: With unemployment at a historic low, it has been puzzling why wages have not been rising more, so that more can benefit from a growing economy. At last, we may be seeing some positive movement. (New York Times)
- NAFTA Renegotiation in Trouble: The China trade conflict gets all the attention, but the trade agreements with Mexico and Canada may be more important to the U.S. The attempted NAFTA do-over may be in big trouble. (Washington Post)
- Tax Law Impact on Blue States: When the latest tax legislation was enacted, there was great fear that the SALT provision (i.e., state and local tax deduction limitation) would negatively impact the so-called “blue” states with high state and local taxes. To date the impact has not been as catastrophic as feared. I’d caution that the impact may still be felt as taxpayers file more tax returns. ( Washington Post)
- Maine School of Science and Mathematics! Talk about an educational success story, MSSM is a small, public magnet school located in Limestone, Maine, near the Canadian border. The recently released U.S. News & World Report annual national rankings of high schools just ranked MSSM second in the nation out of more than 17,000 schools. (Boston Globe)
- A Toast to Allagash Brewing: I rarely drink beer but do enjoy an occasional Allagash White. Apparently, I’m not the only one. James Beard has awarded its coveted outstanding wine, beer and spirits production award to Rob Tod, the founder of Portland’s Allagash Brewing Co. (Portland Press Herald)
- Book Recommendation: For mystery lovers, I devoured and can therefore heartily recommend Kingdom of the Blind, the latest in the Quebec sited Armand Gamache series, written by Louise Penny.
We made a modest change to the formatting this week to make the information sources clearer and welcome any feedback you may have. Likewise, feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.