6 August 2018

1) While the US economy is going gang busters right now, there are rising doubts of just how long this might last. First concerns are for the twin forces of inflation and interest rates. As business continues to do good, inflation will tend to creep up, so the Feds must adjust increases in the interest rate to counter inflation without dampening business. A second concern is an asset bubble burst. The asset of concern is the debt bubble, both domestic and international. If interest rates rises, debtors could have difficulties making their payments. Finally, the developing trade war could precipitate economic unraveling that could result in a recession.

2) The just released job report is considered good at 157,000 jobs. The expected 190 to 195,000 jobs was offset by Toy-R-Us loss of 34,000 jobs. The unemployment rate is down at 3.9% , so economic indicators are strong.

3) China threats another $60 Billion in tariffs as a trade war continues to develop. Tariffs range from 5% to 25%. Some are reporting that China’s economy is actually lousy, that investors are leaving China while at the same time it’s money value is falling. At the same time, South Korea has announced levees of taxes on big high technology US corporations because of domestic complaints that these corporations not paying taxes.

4) 3 AUG 18: Stock market closings:

Dow                  25,462.58      up      136.42
Nasdaq               7,812.02      up          9.33
S&P 500              2,840.35      up        13.13

10 Year Yield     down     at    2.95%

Oil    down    at    $68.68

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