Mike’s Morning Brief – May 15, 2019

What’s going on in the world…

Market opens lower again, erasing much of yesterday’s weak bounce. Concerns around trade with China and a new sign of potential American Consumer sluggishness has been exposed. Retail sales came in worse than expected in the US. In fact, they contracted by 20 basis points when they were expected to increase by that margin. April Industrial production also missed expectations. It was the worst report since February of 2018. Is this going to be leverage for China leading them to believe that Trump needs a deal quicker than thought because the US economy is slowing that fast? China reported weaker economic data as well overnight as well, but the PBOC plans to increase its stimulus to support the Chinese economy. Trump has been blasting the Fed to do the same thing here, though it’s been falling on deaf ears. That said, the Fed will seemingly act if the US economy does contract faster than thought. Powell pretty much already said that. But it won’t likely be immediate. But the Trade War has immediate implications. The IEA cut global oil consumption estimates based on weakening demand. WTI is lower in early trading, still holding $60. This is happening despite elevating tensions with Iran. This is a really big deal that doesn’t seem to be getting proper attention. Money continues to flow into Bonds and Gold, both demonstrating safe-haven status. Volatility is back. Keep those belts buckled.

Have a great morning,

Mike Frazier