The Market Week in Review

The U.S. stock market declined on Friday and wiped away the week’s previous gains after President Trump said he plans to respond to China’s announcement of an additional $75 billion tariff on U.S. products.  Consequently, interest rates also fell as the 10-year treasury yield dropped from 1.55% last week to 1.53% today.  Meanwhile the spread between the 10-year treasury and the 2-year treasury yield approaches inversion once again as it narrows from 0.07% to 0.01%.  The price of gold also rose 0.81% to $1,536 an ounce amid the recent U.S.-China trade war developments.  The price of crude oil dropped 1.89% to $53.90 a barrel as China also announced that it will impose an additional 5% tariff on U.S. crude oil imports starting next month.

This Week's Economic Highlights

  • U.S. existing home sales rose by 2.5% in July to a seasonally-adjusted annual rate of 5.42 million as falling mortgage rates make home buying more affordable.  Over the past year existing home sales have risen a sluggish 0.6%, while the median sales price has increased 4.3% to $280,800.
  • The minutes from the Federal Reserve Open Market Committee (FOMC) meeting in July showed that many officials viewed their rate cut as more of a recalibration rather than the start of a quantitative easing cycle.  However, two officials noted that they would rather of had a 50 basis point adjustment rather than the 25 basis point adjustment agreed upon.
  • Initial unemployment claims fell by 12,000 for the week ending August 17th to a total of 209,000, while the more stable four-week average rose by 500 to 214,500.  Continuing unemployment claims, which lag initial claims by a week, fell by 54,000 to 1.67 million.  Both initial and continuing claims remain near historic lows.

Tidbit

According to the New York Federal Reserve, a record 7 million Americans are 90+ days behind on their auto loan payments in 2019, many of which are under the age of 30 years old.

Quote

“It’s better to be at the bottom of the ladder you want to climb than at the top of the one you don’t.”

     – Stephen Kellogg

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