Author: Zac Martin, Investment Associate
Week Ending May 9th – 90 More Days
The Trump Administration announced a tentative deal with China, suspending the reciprocal tariffs and additional ad valorem rates (executive orders 14259 & 14266) for another 90 days. This implies that some Chinese goods may be subjected to a 50% US import duty and if a deal does not hold, this rate could be set higher.
ISM Services PMIs continued its expansionary trend for the tenth straight month with the largest increases being prices, new orders and employment. The only subindex to decline was the business activity subindex, respondents signaled that this was due to the recent tariff pull through in Q1. Additionally, ISM Manufacturing PMIs remained in contractionary territory as production fell 4.3 points 44, which is a 5-year low.
Federal Opening Market Committee meeting for April unsurprisingly left rates unchanged, bound between 4-1/4 to 4-1/2. The fed has warned for a higher stagflation risk, however, Chairman Powell noted that looking at private domestic final purchases, GDP grew 3% in Q1 versus the -0.3% decline.
The Week Ahead:
- Consumer Price Index (5/13)
- PPI & retail sales (5/15)
- Building Permits & housing Starts (5/16)
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