“News from the US…..”

market update website

News from the US

President Trump faced criticism from inside his party this week due to the remarks he passed whereby he equated neo-Nazis to counter-protesters in Virginia and that he failed to personally denounce white nationalists, neo-Nazis and others who held a rally in Virginia that ended with a driver of a car slamming into pedestrians.  There were clashes on Saturday between groups that were protesting the decision of Charlottesville to remove a statue of Confederate General Robert E. Lee and those who opposed the rally.  Dozens of people were injured.  Furthermore on Wednesday Donald Trump disbanded two high profile business advisory councils which were set up to advise the president after a number of CEO’s have stepped down.  The chief executives have quit in protest over his remarks blaming the violence over the weekend in Virginia on anti-racism activists as well as white nationalists.

US and North Korea

Two top US national security officials, Central Intelligence Agency Director Mike Pompeo and national adviser H. R. McMaster tried to reduce the fears of an imminent nuclear war with North Korea by commenting that there was no indication that a war will break out. The comments helped to ease the worries emanating from an escalation of tensions between the US and North Korea.  The shares in Asia outside Japan on Monday climbed while the South Korea’s benchmark index rose as much as 1 percent.

The FED Minutes

According to the July 25-26 Open Market Committee minutes, the Federal Reserve officials engaged in a thorough discussion about inflation. A majority of the participants forecast that inflation over the medium term would gradually rise to the 2 percent target, however, some others saw the likelihood that inflation might remain below the 2 percent for longer than is currently expected.  The minutes did not specify when the Fed would begin shrinking its balance sheet this year.  The next FED meeting is scheduled for the 19-20 September.  The odds of an interest rate hike in December stands at two-in five ahead of the minutes to a range of 1.5 percent from 1.25 percent.  The Fed’s portfolio amounts to $4.5 trillion in total assets, generated from three rounds of quantitative easing as the central bank added additional stimulus with direct bond purchases when in December 2008 the benchmark lending rate was cut to zero.  The Consumer price index rose 1.7 percent for the 12 months ending July while the Fed’s preferred measure which is tied to consumption rose 1.4 percent in June.  Unemployment last month matched a 16-year low of 4.3 percent while average hourly earnings rose 2.5 percent for the year, which is around the average rate during the recovery which began in June 2009.  Gross Domestic Product grew by 2.6 percent in the second quarter.

China

The real estate market in China which employs millions is losing momentum effecting other sectors of the economy such as the demand for steel, cement, glass, the consumption of appliances and cars. Fixed asset investment such as infrastructure, roads, bridges, water projects and public facilities has slightly declined.  In July factory output, investment and consumption have slowed down.

EU

European stocks have advanced on Wednesday amid optimism about the growth of the EU economy that has gathered pace in the second quarter as more countries within the EU have joined the recovery. The 0.6 percent expansion was supported by the growth in Germany and Spain’s performance for almost two years.  The stimulus is starting to reap some benefit as the upswing is spreading across the other 19 nations.  Through exports and investment, France has experienced strong and continuous expansion since 2011 while the Netherlands experienced the fastest growth since the end of 2007.  On the other hand Italy should be experiencing an increase in gross domestic product of around 1 percent for the first time since 2010.

UK

In the second quarter UK consumers have continued experiencing the fastest inflation in four years.   Basic wages rose an annual 2.1 percent in the three months while lagging behind a surge in price growth which is driven by the decline in the pound in the wake of the Brexit vote.  According to the Office for National Statistics real income has remained down 0.5 percent year-on-year.  The UK wage growth has beaten the forecasts but still lags inflation.  The unexpected acceleration in the wage growth and the drop in unemployment has pushed the pound higher.  Sterling has climbed from its weakest level since October against the euro.

Sweden

Over the past three years the Riksbank (the Swedish Central bank) has tried to boost inflation by cutting rates well below zero and pumping money into the economy through government bond purchases. Last month the bank started to take steps towards normalizing the policy. Headline consumer prices rose an annual 2.2 percent in July exceeding the 2 percent target while underlying prices rose an annual 2.4 percent, which is also above the 1.8 percent forecast.

Spain – Terrorist Attack in Barcelona

La Ramblas street in Barcelona was attacked by a van plowing into the crowds of pedestrians killing 13 people and leaving many injured. The extremist group Islamic State claimed responsibility for the bloodshed.  This is the latest of vehicle assaults which have been hurting European cities in recent years.  As a massive manhunt was underway a car ran over two police officers in the outskirts of the city.  Later on police shot four suspects in another attack in Cambrils which is a coastal community south of Barcelona.  A fifth was wounded and detained.   For Spain, the bloodshed that happened on Thursday is the deadliest attack on the country since 2004 when Al-Qaida inspired bombers killing 192 people in  coordinated assaults on Madrid train commuters.

 

Antonella Mercieca

Client Relationship Manager

Source:

Bloomberg, Reuters

Date:

August 18th, 2017


‘Disclaimer: The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice. Similarly, any views or options expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Timberland Finance has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Timberland Finance does not accept liability for losses suffered by persons as a result of information, views of opinions appearing on this website. This website is owned and operated by Timberland Invest Ltd.’

Subscribe To Our Newsletter

Be one step ahead with our latest news updates.

Timberland Finance,
CF Business Centre,
Gort Street,
St Julians STJ 9023
Malta