For the week ending 7/13/18, the domestic production of crude oil in the United States reached 11.0 million barrels a day, the highest volume ever generated in America. That total is more than double the 5.1 million barrels of oil the US produced just 10 years ago. But our economy, the world’s largest, still required daily imports of 9.1 million barrels of crude, 40% of which is imported from Canada (source: Department of Energy).
The US may be pressing ahead with tariffs on another $500 billion of Chinese imports coming into the United States, but elsewhere many trade duties are being eliminated. The 28-nation European Union and Japan signed an agreement last week in Tokyo (completed after 5 years of negotiations) to eliminate about 99% of the tariffs on Japanese goods sold to the EU countries, and in turn about 99% of the tariffs on EU exports headed to Japan will also be lifted. Speculation is being voiced on Wall Street as to whether investors can expect to see a “Powell Put” (i.e., a lowering of interest rates by the Fed to counteract stock market tumbles due to an escalating trade war), much like the recurring “Bernanke Put” that came to the rescue of the US economy in 2007-08 (source: BTN Research).
4 East Coast states (New York, Connecticut, Maryland and New Jersey) filed suit last week against the federal government, claiming that the $10,000 “state and local tax” (SALT) deduction limitation that is part of the 2017 “Tax Cuts and Jobs Act” is an “unconstitutional assault” on its residents. At issue is the legality of the arrangement in which state taxpayers make a “charitable contribution” to a fund set up by their city, allowing them to receive a “tax credit” against their property taxes. Just 6 states nationally get 51% of the SALT deduction’s use (source: Internal Revenue Service).
Notable Numbers for the Week:
EIGHT IN TWENTY - The S&P 500 has had 8 declines of at least 10% but less than 20% over the last 20 years. The last 10% “correction” ended on 2/08/18 or 5 ½ months ago (source: BTN Research).
GOOD BANKS - As of last Friday (7/20/18), there has not been a bank failure in the United States in 217 days (i.e., more than 7 months) that required a federal bailout from the FDIC. That the longest stretch between bank failures since 9/28/07 or nearly 11 years ago (source: Federal Deposit Insurance Corporation).
TOP SHELF INCOME - 1 out of every 22 individual income tax returns (4.5%) filed for tax year 2015 reported adjusted gross income of at least $200,000 (source: Internal Revenue Service).
NO COMMUTE NECESSARY - 23% of American workers did some of their work or all their work from home in 2017 (source: Department of Labor).
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