The Federal Reserve’s Open Market Committee doesn’t meet again until next week (sad emoji), but at least it’s Shark Week! Enjoy your thrills. Apparently this year there will be “Dancing with the Sharks.” Unless I’ve been duped by traditional media.
Stock markets were mixed last week, with the Nasdaq Composite up 1.5%, the Standard & Poor’s 500 up .6%, and the Dow Jones Industrials flat. On Wednesday, the president’s reported intention to fire Fed Chief Jerome Powell caused markets to drop sharply, which led to a public denial of that intention and a market recovery.
August first (not this Friday but next Friday) is when new tariffs are set to take effect, after having been postponed more than once. We can’t know if they will be postponed again, enforced, or changed, or abandoned, although knowing would be nice. The tariffs morph so often that it really is hard to keep track. In the meantime the president has proposed a new tariff of 200% on prescription drugs – with no date announced. The overall average tariff rate before the second Trump term began was 2.5%. Now it is 15.4% and still changing. Tariffs are taxes!
A year ago in May, China accounted for 67% of smartphone imports. In May of this year, it was down to 8%. Not coincidentally, U.S. importers currently pay a 20% tariff on tech from China. Raise your hand if you want your kids to make iPhones here in the U.S.
Amazon celebrated its 30th birthday last week. The company opened on July 16, 1995. But that can’t be 30 years ago, can it? Oh. I see. Never mind.
In inflation news, the consumer price index rose 2.7% year over year, while core inflation (which excludes food and energy) roe 2.9%. As I say every month, we are not yet at the Fed’s target inflation rate of 2%, but at least we are no longer facing inflation of 9.1% (looking at you, June of 2022).
Retail sales numbers for June came in with a 0.6% hike – much more than the 0.1% which was expected. May numbers had been kind of meh, probably since consumers overbought in April as a result of the announced tariffs. Then by the time June came around, they were out of everything again.
Circling back to the Fed – we (and everybody else) are expecting NO rate cut at next week’s meeting. The odds are against a cut at the following meeting in September, too. Remember that as long as the economy is chugging along, which it still is, a rate cut is not called for. If the economy chugs too hard, a rate HIKE might be necessary, but the Fed so far is successfully walking the tightrope between the two.
It’s probably time for you to lock in your oil rate for the winter. Here’s why I’m not going to do that: according to the International Energy Agency, “global oil supply is set to rise three times faster than demand this year” (Wall Street Journal). If you own an oil company, that is perhaps not good news, but for those of us who consume oil and gas, yay! If correct, the IEA is signaling that prices are going to drop. Note: I am not advising anyone else to live on the edge with me. Your situation is unique.
Astronomers have observed a collision between two black holes, each larger than a hundred suns. It is the largest such merger ever recorded, and it was detected using tools imagined by Albert Einstein more than 100 years ago. Contrary to popular belief, it was not me consuming a pizza.
For the week ending on July 18th, the S&P closed at 6,296, the Nasdaq at 20,895, and the Dow at 44,342. The yield on the 10-year Treasury Note finished at 4.432%. U.S. crude oil cost $67.34 per barrel, N.Y. gold cost $3,386.00 per ounce, and one Euro was worth $1.17.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) The Wall Street Journal, The New York Times, The Washington Post, USA Today, Barron’s, The Economist, MarketWatch, Morning Brew, Axios, Yahoo Finance, Bloomberg, Business Insider, CNN, CNBC, Reuters, and The Associated Press. If you have questions, please call us at 203.458.5220, or reply to this email to reach me, Liz Cook.
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