“It ain’t the heat, it’s the humility.”
-Yogi Berra
Here’s what you need to know this week:
· Stocks continue their gentle drift upwards
· A quick look into the latest tariff developments
No News is Good News
Markets posted light gains last week on a conspicuous absence of any major news. The S&P 500 and NASDAQ both charted new highs while the Dow Jones is within striking distance of its own all-time high. The only major market news was the Census Bureau releasing the retail sales report for the month of June. The report showed sales bouncing positive for the first time since the announcement of President Trump’s tariff plan:
Tariff Latest
Speaking of tariffs, the US is fielding multiple negotiations this week with varying degrees of success. President Trump hosted President Ferdinand Marcos Jr. of the Philippines on Tuesday to negotiate a deal although as of writing no progress has been announced[1]. US Treasury Secretary Scott Bessent has been discussing terms of a deal with China and told the press that tariffs on China will likely receive another extension as he and Chinese Vice Premier He Lifeng continue to hash out terms. Bessent and Lifeng are scheduled to meet in Stockholm next week[2].
The US has agreement to trade frameworks with a smattering of countries such as Vietnam and the UK, however no trade deals have been finalized. Other countries such as India have remained obstinate and do not appear poised to cut a deal by August 1st. While many of these tariffs have yet to take effect, some have, such as: the 10% global tariff, 25% China tariff, and 25-50% tariff on steel from the EU[3]. These tariffs have already begun to increase prices across certain categories:
These increases have caused annualized inflation to increase each of the past two months and are a key reason why the Federal Reserve has been so hesitant to cut interest rates. Markets are still acting unconcerned about the August 1st deadline, but without more deals or extensions we may see more price hikes on consumer goods in the near future.
What Else
· The Federal Reserve will hold its next meeting to determine interest rate policy next Tuesday and Wednesday; analysts overwhelmingly expect them to hold rates steady
· Second quarter earnings season begins this week with big bank earnings leading the way
· Torrential rains battered the East Coast over the weekend, causing flash floods in Washington D.C. and Maryland
· President Trump continues to threaten Federal Reserve Chairman Jerome Powell’s job; analysts are unsure how serious the threats are
· The government published more than 6,000 documents related to the assassination of Dr. Martin Luther King Jr.
· Scottie Scheffler won the Open Championship in a dominant performance
What We’re Reading
The Leaning Tower of… Guizhou? When the local Chinese government attempted to eminent domain a small village in order to develop new high rises, one man rushed home to prevent the demolition of his parents’ house. He added a second story to his parents’ home in an attempt to elicit a higher payout from the government. Then he added a third story, and a fourth. Soon their humble shack became an 11-story tower that dominates the local landscape. Click below to see photos of this feat of ingenuity and to read the ongoing drama between the Chen family, the village and the local government:
What’s Happening Downtown
The Myriad Gardens is hosting a Butterfly Garden Party this Saturday, July 26th. This family-oriented event will educate visitors on how butterflies help plants grow, will feature live butterflies within the Conservatory and will provide snacks and juice. The event runs from 1:00-3:00 PM and costs $15 for non-members, click below to learn more:
· https://myriadgardens.org/events/butterfly-garden-party/?mc_cid=597c68114a&mc_eid=71bf387036
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Jenni Hess
Sources: [1] NYT [2] CNBC [3] Trade Compliance Resource Hub