08 Aug Trade War Fears Heat Up Once Again
The upward trading channel in the stock market remains firmly in place this morning, which is likely why stocks haven’t reacted adversely to the news of China’s recent retaliation to the 25% tariffs that the US will be placing on $16 billion worth of China’s goods being imported into the US. China’s retaliatory response was a tit-for-tat 25% tariff on $16 billion worth of US goods. This will impact US businesses in the fuel, gas, car, coal, grease, Vaseline, asphalt and plastic industries. This will likely influence stock prices as the tariffs go into effect.
Overall, a trade war isn’t a good thing for the US economy. It will create winners and losers, depending upon which side of the tariff they land. Hopefully, the US and China will come to an agreement that will stop further escalation in what seems to be a battle that is far from over.
Mortgage interest rates are just beneath seven-year highs that we experienced just a few months ago. Since early July, the bond market has been relatively flat. With a triple ceiling of resistance holding interest rates from making meaningful improvements, the odds of rates moving higher are greater than rates heading lower.
We will maintain our locking bias.