Bellevue Perspectives

Monday Minute

  • June consumer confidence numbers fell to a 21 month low thanks to uncertainty around trade.  The Fed’s recently dovish tone also weighs on consumers, as the expectation for a continued economic slowdown builds.  As I mentioned last week, it is important for the Fed to not induce panic with their commentary supporting a potential rate cut in July.  The unemployment rate is still hovering near a 50-year low of 3.6%, so the consumer still has a lot to be happy with.  A precautionary rate cut by the Fed should be sufficient to help with confidence.
  • A temporary trade truce was reached this weekend between the US and China. Perhaps both sides realized a deal wasn’t likely anytime soon, and that’s why they each agreed to a minor concession to make the status quo much more tolerable, which reduces the urgency to strike a major deal. There are four major elements to the truce: 1) the US delays tariffs on the $300 billion, 2) the US allows some exports to Huawei, 3) China agrees to buy some US agricultural products, and 4) there is no deadline linked to any of the first three items.  Details are still scarce, but the equity market seems to like it.

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