For several months, the trade situation seemed manageable. Gradually increasing tariffs on Chinese goods provided President Trump with numerous points for discussion (and tweets), with surprisingly little economic fallout. While U.S. economic growth did slow, the connection to the trade war remained ambiguous. However, a significant shift occurred on Monday when China allowed its currency to rise above a crucial threshold: 7 yuan to the US dollar, marking the yuan’s lowest level in over a decade.
US Treasury identifies China as a “currency manipulator”: WSJ
Risk of a currency war escalates: CNBC
China takes steps to mitigate yuan’s decline: Bloomberg
North Korea conducts missile launches into the sea for the fourth time in two weeks: Reuters
Former Federal Reserve governors caution against compromising the central bank’s independence: CNN
German factory orders increased in June: Bloomberg
Global production rose to a three-month high in July: IHS Markit
US services PMI increased in July, hitting a four-month high: IHS Markit
US services growth (ISM Non-Manufacturing Index) dropped to a three-year low in July: CNBC
10-year Treasury yield falls to 1.75%—its lowest since 2016:
Real estate investment trusts (REITs) were the standout performers among major asset classes last week, as investors shifted their focus away from stocks. Notably, equities in emerging markets suffered significant losses as the escalating tensions from the US-China trade war prompted investors to seek safer assets.
Back-to-back mass shootings shock America over the weekend: NY Times
Hong Kong protests push the city toward an “extremely dangerous situation”: Reuters
India revokes Kashmir’s special status, risking renewed violence: BBC
Iran claims to have seized another oil tanker in the Persian Gulf: CNN
China moves to halt imports of US agricultural products: Bloomberg
Trump overrides advisors to impose new sanctions on China: WSJ
China’s services sector expanded at its slowest rate in seven months in July: Reuters
The final Eurozone Composite PMI for July reveals stagnant output levels: IHS Markit
US payrolls increased moderately in July: CNBC
US consumer sentiment remains near post-recession highs in July: MW
Factory orders in the US rose but below expectations in June: Reuters
China allows the yuan to fall to 7 against the US dollar, escalating the trade war: Bloomberg
By Jennifer M. Silva
Summary via publisher (Oxford U. Press)
The economy has been challenging for American workers for many years, diminishing the opportunity for parents to secure a better future for their children—an essential aspect of the American Dream. Although many assume that individuals in struggling, marginalized working-class communities will naturally rise up against their plight, the events of the 2016 election highlighted our misunderstanding of how these groups translate their grievances into political action. In *We’re Still Here*, Jennifer M. Silva presents a rich, multigenerational narrative filled with stories of pain, place, and politics that resonate long beyond the Trump administration. Based on over 100 interviews with residents—black, white, and Latino—from a declining coal town in Pennsylvania, Silva illuminates the lived experience of the American Dream’s decline.
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In July, US companies added 148,000 jobs to their payrolls (after seasonal adjustments), as reported by the Labor Department here. This increase is below June’s figures, but the year-on-year trend for private payrolls has remained solid at a growth rate of +1.7%
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The risk premium for the Global Market Index is projected to achieve an annualized return of 4.8%, based on updated data through July. This forecast remains unchanged from last month’s analysis. The GMI is a non-managed portfolio that is market-value-weighted, encompassing all major asset classes (excluding cash). The performance outlook for this passive benchmark indicates the expected yield over the projected “risk-free” rate for the long term.
China pledges to retaliate against Trump’s new trade tariffs: CNBC
US withdraws from a Cold War-era nuclear treaty with Russia: BBC
Japan expands trade tariffs on South Korea: NY Times
Eurozone retail spending increased in June: Reuters
Global manufacturing activity shrank for the third consecutive month in July: IHS Markit
The ISM Manufacturing Index for the US dipped to 51.2, hitting its lowest point since August 2016: CNBC
The US Manufacturing PMI for July fell to its lowest level since September 2009: IHS Markit
Construction spending in the US decreased by 1.3% in June compared to the same month last year: HW
Jobless claims in the US increased moderately last week, but the labor market remains tight: CNBC
Job cuts in the US slowed in July, declining by 7.5% compared to the previous month: CG&C
The July US private employment data is expected to hold steady at a +1.7% annual rate:
US equities maintained their leadership among major asset classes in July. For the second consecutive month, the Russell 3000 Index achieved the highest monthly return, closely followed by US real estate investment trusts (REITs).
Highlights from last night’s Democratic debate: The Hill
The Federal Reserve reduces interest rates by a quarter point in a ‘midcycle adjustment’: CNBC
The US imposes sanctions on Iran’s foreign minister: CNN
China experiences contraction in factory activity in July: CNBC
Eurozone manufacturing activity declines sharply in July: IHS Markit
Brexit concerns weigh on UK manufacturing in July: Reuters
US labor costs grew at the slowest rate in a year and a half during Q2: Reuters
The year-over-year trend for US private employment slipped to +1.7%, marking a 20-month low: ADP
