The USA implemented its 3rd round of tariffs aimed at Chinese imports last week. The latest target was $200 billion of products shipped to America, on top of the $34 billion of imports earmarked in July and another $16 billion in August. Together the $250 billion of Chinese imports now subject to tariffs represents half of all Chinese imports coming into the USA. China has responded with retaliatory tariffs on $110 billion of American exports, payback that represents levies on 85% of the goods American businesses sell to China. If the tit-for-tat battle continues, China may resort to other strategies, e.g., currency manipulation. A weaker yuan would make the cost of Chinese imports cheaper to American buyers, offsetting the impact of the new tariffs (source: BTN Research).
Equity investors have effectively navigated rising interest rates, Washington gridlock and international conflict (North Korea and Syria) in 2018. The S&P 500 climbed to yet another all-time closing high last week, its 19th record close this year and 207th during its ongoing 9 ½ year bull market run. The stock index is up +11.1% YTD (total return) with just over 3 months to go in the year (source: BTN Research).
Hurricane Harvey hit Texas more than a year ago (on 8/25/17) and caused $125 billion in damages (inflation adjusted), the 2nd costliest weather disaster in US history, trailing only Hurricane Katrina (2005). Hurricane Florence hit North Carolina on 9/14/18, killing 43 people and causing an estimated $38-50 billion in damages (source: National Hurricane Center, Moody’s Analytics).
Notable Numbers for the Week:
THIS YEAR - Last Wednesday (9/19/18), the national debt reached $21.494 trillion, an increase of $1 trillion from our nation’s outstanding debt of $20.493 trillion as of 12/31/17 (source: Treasury Department).
WE ARE IMPORTANT TO THEM - 19% of Chinese exports are purchased by American consumers, making the US the # 1 trading partner of China (source: WTEx).
JUST IN CASE - 27% of 2,000 adults surveyed own group life insurance through a policy made available by their employer but paid for by the employee. 70% of those purchasing the group insurance have death benefits of no more than $100,000 (source: OneAmerica/The Harris Poll).
SOFTENING MARKET - 20% of the single-family homes for sale in San Diego dropped their asking price in June 2018, the highest percentage to do so in any major US city. 14% of single-family homes nationwide lowered their asking price in June 2018 (source: Freddie Mac).
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