After opening higher the major averages fell in morning trade following Trumps announcement of the imposition of 200 billion in additional tariffs on Chinese goods as was widely expected. So much for the trade talks announcement the other day. The previous 50 billion in tariffs were met with a tit-for-tat response by the Chinese and I would expect them to do the same again. An increasing number of pundits have weighed in on a protracted trade war and the consensus is sharply higher consumer prices, lower stock prices and lower economic growth.
Import prices fell .6% in August, double expectations, on a large decline in oil costs. Export prices slipped .1%. Trade prices have now fallen for 2 consecutive months. This series does not include tariffs.
Retail sales advanced .1% in August but missed expectations substantially. July’s sales were revised up. On a year ago basis sales have gained a respectable 6.6%.
A recent report by Attom Data Solutions showed that despite the heady gains in real estate since the last crisis a number of regions remain deeply underwater by 25% or more. In numerical terms this works out to 5.1 million homeowners still trapped in their homes. Most of these communities are far from the booming coastal areas of course but can found squarely in Middle America. Just another detail lost in the great recovery narrative.
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