The Federal Reserve was in the spotlight this week as investors were anticipating a cut in rates. The Fed has been hinting about cutting rates for the last month and did not disappoint. Also, the growth number for Q2 GDP turned out to be a little better than expected, but surprisingly the 2018 GDP number was revised downward quite a bit and below 3% (someone in the White House will not like that). Articles on those topics as well as if Millenials will buy Boomers’ homes, reading economic indicators, eating out in Portsmouth, how blueberries can reduce the chances of skin cancer or even sunburn, a stand-up economist, why chances of a hard Brexit just increased, and why taking vacations may save your life!
Enjoy this week's The Friday Buzz. Have a great weekend!
- The Federal Reserve Cuts: For the first time since the Great Recession, the Federal Reserve has cut short-term rates. This week the Federal Reserve announced a rate cut of .25%. It will be surprising if the trend stops there. But Fed officials will be watching the economic data to determine actions at their upcoming meetings in the fall. By the way, not everyone believes there should be cuts. WSJ CNBC
- Q2 GDP Better Than Expected, but 2018 Number Revised Down: Last Friday, it was reported that U.S. Gross Domestic Product (GDP) came in a little higher than expected at 2.1% when the expected number was 1.8%. This number will be revised over the ensuing quarters. Which is what happened to the 2018 figure which on Friday was revised from 3.0% down to 2.5%. That will not sit well with the President who had touted tax cuts as spurring growth to 3%. WSJ Reuters
- Reading the Leading Economic Indicators: There must be hundreds of economic statistics. Many of them are grouped into leading, coincident, and lagging indicators of the economy. Leading indicators gauge the future direction of the economy, coincident indicators tell how the economy is doing now, and lagging indicators are rear-view looking and change after the economy changes. There is no magic formula of which ones to watch that definitely tell what to expect up ahead, but they are worth watching. Right now, leading indicators are showing mixed signals, not surprising given the slowdown in the second quarter of this year versus the first quarter. NYT
- Dining Out in Portsmouth: We have an embarrassment of riches when it comes to eating out in coastal northern New England. Recently Zagat's of Boston released a list of dozen great spots to dine or drink in Portsmouth. Some of my favorites on the list are Cava, Black Trumpet, Vida Cantina, and Great Rhythm Brewery. Zagat.com
- Will Millenials Buy the Baby Boomers' Homes? Many Millenials are waiting longer and having fewer kids than previous generations. Because of this, demand for suburban homes is reduced, and maybe even more so for larger homes if the families of the future are smaller. This may make it more challenging for Boomers wanting to sell their family homes in the burbs to downsize or move. Forbes
- Eating Blueberries May Reduce Skin Cancer & Sunburn: It's summertime and hopefully everyone is wearing plenty of sunblock when out in the sun. But did you know scientific studies have shown that eating high-antioxidant rich foods can significantly reduce sunburn? Alcohol has been shown to do just the opposite and will reduce the skin's ability to protect itself. So go grab some wild blueberries and raspberries and munch away! Nutritionfacts.org
- Reported Corporate Earnings Down So Far: With just under half of the S&P 500 companies reporting earnings for Q2, overall the earnings are down 2.6% versus the previous year. For companies that derive more than 50% of their revenue outside the U.S. the earnings drop was more severe at 13.6%. Not all company earnings were negative as the likes of Starbucks and Google were still doing well. But many market watchers were expecting overall lower numbers due to slower global growth, the strong dollar, and tariffs and trade tensions. Another reason why comments out of the Federal Reserve have been dovish lately. FACTSET Reuters
- An Economist Walks Into a Bar… We do our best to report on the economy and markets and hopefully, make it interesting and not too dry. A challenge indeed. Well, if you need a good chuckle about economics (and economists), stand up comic and environmental economist Yoram Bauman has a fun bit about the principles of economics. For those interested, at the end he discusses climate change and carbon taxes, after all, he is an economist. YouTube
- Hard Brexit? Boris Johnson wasted no time after becoming Prime Minister to draw a hard line in the sand with Europe. He stated the previous deal was not good enough, and it would have to be revised or Britain would leave the European trading bloc with no deal – a hard exit. European officials have stated the previous deal was the best they will do. The deadline for a deal is October 31st. BBC
- Take a Vacation or Die! OK, that statement is a little extreme, but studies show benefits to vacation including better physical health and increased longevity. Americans are known for working a lot and not using up all their vacation time. So, take some time off, your life may depend on it. The Atlantic