Mike’s Morning Brief – June 27, 2018

Mike working on his computer

What’s going on in the world…

Market opens in the green again, but the losses from Monday on the major US indices continue to be felt. It’s been a lackluster bounce with both Tech and Financials showing weakness. Energy is the standout strength as crude prices have surged in recent days. WTI is over $71 in early trading which is a 4-year high. The threat of a Trade War continues to be front and center. Tensions have escalated around the globe. The global economy is feeling the pressure. The one constant has been earnings and the US economy. They both continue to grow, and the growth rate is accelerating. They are certainly threatened too by tariffs on trade, but the Market suggests the threat will dissipate over time and the US will ultimately benefit. Global markets have felt the pain of trade much more so than the United States. China’s Shanghai Composite is in Bear Market territory, having fallen 20% from its January highs. The White House cooled its rhetoric on trade, allowing Congress to take the lead on intellectual property protection for American innovation. The Committee on Foreign Investment in the U.S., otherwise known as CFIUS, will take the lead on Chinese investment in America. The President is still hot on the HOG, sending constant criticism at Harley Davidson for moving some of its manufacturing operation to Europe in response to tariffs. Another crisis is bubbling in Europe, and it is a potential catastrophe. A carbon dioxide shortage is shrinking beer production. There has been a beer shortage in Russia for the World Cup. Now that’s a crisis.

Have a great morning,

Mike Frazier

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