Bellevue Perspectives

Monday Minute

  • Friday was a very busy day in the tit-for-tat trade dispute with China.  The Chinese government said it would put tariffs of 5% and 10% on $75 billion in U.S. goods, starting on Sept. 1 and Dec. 15 to coincide with the next two rounds of U.S. tariffs. Less than two hours later, Federal Reserve Chairman Jerome Powell said he was ready to provide stimulus should the U.S. economy enter a slowdown.  Trump later followed with demands that U.S. companies find alternatives to doing business with China and bumped up proposed tariff rates from 25% to 30% for October 1 tariffs and 10% to 15% on tariffs set for Sept 1.  The equity markets responded accordingly.
  • Not surprisingly, Monday brings positive talk on trade and a positive equity market.  We urge investors to not get caught up in the day to day headlines.  An actual trade deal doesn’t look likely to us in the near term, but a trade standstill at some point and positive news out of Hong Kong, Iran, and Brexit could all benefit investor sentiment.  We look at short term positive moves as an opportunity to bring portfolios back to their target allocation while uncertainty persists.

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