Good morning. Earlier this week I was hit with what I thought was the flu but then tested positive for Covid (ugh) and … fortunately … feel at the moment as if I have fully recovered. Well, investors also looked for a while to be a bit under the weather but while not fully recovered, seem to be on the way, regardless of the continuing trade tensions between China and the USA … as markets are again tiptoeing upward. It is really interesting … though, admittedly, a bit bothersome … to see how stories surrounding trade issues seem to change so rapidly. Last week we read about how China was going to halt the export of all “rare earth metals,” which fanned the flames of the continuing tariff war between our countries. But hold on for just a second. Now Newsweek reports China claims reports surrounding “rare earth controls” have been misinterpreted … are not an outright ban … and will be allowed for companies using them “for civil purposes” … however that is defined. The hope among investors is that agreements can (soon) be made as this seems now to be as much a “war on words” … via tweets … as it is about a “war on trade” and threats about tariffs … and even oil … are being tossed about by both sides at every press conference. Oil? Yes … but not the kind used for energy. We are talking about cooking oil as the Administration realizes the importance of soybean exports to American farmers and are trying hard to see this export continue to ship. Frankly, many of the farmers don’t give two hoots about rare earth or aluminum … they just want to be able to get their crops sold, getting enough money in their pockets to feed their families … and are getting hurt in the tit-for-tat battle taking place right now. That was too much on that topic. Sorry. At least we are about to have stories on the Fed start to take over the news cycle. According to Bloomberg, traders are factoring in a 50 bp (half of a percent) rate cut by the end of the year … and some are wondering what the reaction might be if this does not happen. Funny how every meeting seems as if it is the most important that we have seen in quite a while. This one coming up in less than two weeks is no different. Jobs and inflation (items the Fed address with its “mandate”) are very much in focus as Bloomberg reports job searches are now much greater than employer postings (a bad sign) while prices remain high and new car prices (per first article below) climbed to over $50,000 per vehicle. That wraps it up for me today as I don’t feel very creative at the moment. What brings that in mind is the last article below which claims we reach “the peak of our creativity” at age 60. That, of course, is ridiculous. I hit the peak of my creativity at 29. It has all been downhill ever since. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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