The Markets – The S&P 500 index closed the 2nd quarter up 3.8% for the quarter and up a whopping 17% so far this year. The Dow is now up 14% for the year and the NASDAQ finished the quarter clocking in at +21.94% year-to-date; according to the Wall Street Journal. During the second quarter, more than 60% of the companies in the Dow industrials and the S&P 500 rose, with technology firms notching some of the biggest gains.
Trade Wars: Whether the market run continues may depend on events which could mark a pivotal turning point between President Trump and China’s President Xi Jinping. If the two sides come to an agreement on trade, it could ease fears of a tariff-caused slowdown. Such an agreement would relieve pressure from companies that do business or buy supplies from China—such as semiconductor companies and certain retailers.
On Saturday, June 30, Trump agreed to hold off on imposing tariffs on another $300 billion of Chinese imports, and said U.S. suppliers will be allowed to sell some products again to Huawei. The deal, however, keeps existing tariffs in place, an issue for investors who had hoped the Group of 20 meeting would help pare the current import levies on $250 billion of goods.
People’s Bank of China Gov. Yi Gang said the outcome from the weekend’s meeting was “better than expected,” according to Reuters. But other analysts were more pessimistic on the results of the G-20 summit, as neither side emerged with a path toward a comprehensive trade deal.
Fed Watch: In June the polls moved from predicting one rate cut this year to reflect most traders now expect the Fed to lower rates three times during the second half of this year. A deal with China may change all that, but while we are on hold with China, expectations are high that the Fed lowers rates, which is helping to buoy the markets.
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