One word to describe the current market environment is uneasy. There are a lot of uncertainties about U.S. and China trade, economic growth, and the direction of Fed interest rates. All of those issues are intertwined and impacting the economy and markets. Almost lost in the noise this week is the Mueller investigation which also hangs in the air. And that looks like it will soon move to the forefront. But the nation took a pause from the headlines mid-week to remember President George H.W. Bush.
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- Few Think a Recession is Near: Despite all the volatility and slowing growth, few economists or market watchers feel we are on the precipice of a recession. The consensus seems to be that the economy is slowing from high growth to a much lower level of growth, but not recession.
- Markets Have a Tough Week: No one seems to be bullish currently. With all the uncertainty there don't seem to be any catalysts of strong positive news to lift the sentiment. Stocks were down this week and investors sought the safety of U.S. Treasuries.
- U.S. and China Agreed to a Trade Truce and the Markets Rally Monday: Last weekend, President Trump and President Xi had a fruitful discussion at the G20 Meeting in Argentina. They agreed to temporarily halt the escalating trade war. President Trump agreed to postpone additional tariffs for 90 days during which time the two countries would try to hammer out a deal. President Trump proclaimed it as a great deal. Stocks rally more than 1% on Monday with the good news of easing trade tensions.
- The Stock Rally Ends 24-Hours Later: Saying the confidence in the trade truce lacked staying power is a gross understatement. The next day on Tuesday the Dow Jones dropped almost 800 points as investors once again were concerned about trade, and a slowing economy.
- A Top China Executive is Arrested: Late Wednesday, the U.S. requested that Canada arrest and may request to extradite Meng Wanzhou, the CFO of Huawei, one of China's big technology companies. How big? They sell more smartphones than Apple. It was unknown why she was arrested, but reports suggest the company was being investigated for violating U.S. sanctions on Iran. This will not go over well in China.
- The Mueller Investigation Continues: This week, Robert Mueller recommended no jail time for Michael Flynn. The recommendation came about because he has been so helpful to the Russian investigation. There is more to come from the investigation which continues to march on.
- Regional Economic Reports are Good but Uncertainty Reigns: The Federal Reserve has 12 regional districts. Eight times a year they summarize their regional economic activity in a report called the "Beige Book," described by the traditional color of the cover. The last report of the year came out this week and though overall, they describe moderate economic expansion, there is uncertainty in the outlook for interest rates and trade. Many businesses reported holding back capital spending due to the uncertainty.
- Wanna Get Away? I have to admit, I'm not much of a coupon clipper. As much as I want to use them, I always forget them at home or leave them in my glovebox. So, Groupon, the online coupon merchant, was never that enticing to me. But recently, someone pointed out that there are some great international travel deals on Groupon. Coupons just got a little more exciting for me…
- An Elegant Farewell to 41: The D.C. funeral service for President George H.W. Bush had stories, accolades, laughs, and tears. It was formal and traditional but not stuffy, reminiscent but not wispy, and inspirational but not preachy. It seemed fitting for 41. On Thursday, the last leg of his journey was on a train to his final resting place at his presidential library.
- How to Handle Defeat Gracefully: Though President Bush Sr. lost a bruising battle with Bill Clinton over his dream job, he still had encouraging and kind words for his predecessor.
- Need Some Good News? I didn't even have enough room this week to discuss Brexit, the Khashoggi murder issue, the oil markets, etc. Folks, there's a lot going on out there in the world. No wonder there is anxiety and uncertainty. Take a deep breath, have a good cup of coffee and think about some positive and collaborative things going on in the world. If you need some help, check out the Good News Network for some uplifting news.
Thank you for reading The Friday Buzz. Have a great weekend!