Tariffs Forever and Mixed Data

Indices

• Dow 42,270, +667, or +1.60%.
• Nasdaq 19,113,+376or +2.01%.
• S&P 5,911, +109, or +1.88%.
• MSCI EAFE 2600.33, +20.76 or+0.80%.
• USD10Y4.416%, -9.3bp or -2.06%.
• WTI Crude $60.79/bbl, -$0.97 or-1.57%.

Tariffs Forever

Apparently, we are doomed to discuss nothing other than tariffs for at least the next three and a half years. On Wednesday, the Court of International Trade ruled that all the administration’s tariffs were illegal and ordered customs to stop charging levies. The next day, a Federal Appeals Court overruled the lower court and said customs could continue to charge the tax.On Friday, the Presidentstated on his state sponsored social media channel that China had violated its trade agreement with the United States and a Bloomberg report said that the administration would be tightening restrictions on China’s tech sector. As if this wasn’t enough, the President also threatened to double steel tariffs to 50%, the EU promised retribution and the President immediatelystated he would delay the decision.

Mixed Data

On the economic front, it was a week of mixed data. Initial jobless claims spiked higher, and durable goods orders were horrendous. On the positive side, Q1 GDP was revised slightly higher, the Atlanta Fed GDP nowcast predicted a +3.8% Q2 GDP growth rate (which is fantastic), May Consumer Confidence jumped, May Consumer Sentiment improved, and most importantly, the April Personal Consumption Expenditure was benign regarding prices and inflation.

The Upcoming Week: June2 – June6

Highlights for the upcoming week include final May manufacturing and services data, ADP Private Payrolls, and the Non-Farm Payrolls report on Friday. Earnings continue to trickle in with discount retailers Dollar General (DG), and Dollar Tree (DLTR) as well as chip maker Broadcom (BRCM).

Economic Calendar