Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.
“You say
The price of my love’s not a price that you’re willing to pay
You cry
In your tea which you hurl in the sea when you see me go by
Why so sad?
Remember we made an arrangement when you went away
Now you’re making me mad
Remember, despite our estrangement, I’m your man
You’ll be back, soon you’ll see
You’ll remember you belong to me
You’ll be back, time will tell
You’ll remember that I served you well
Oceans rise, empires fall
We have seen each other through it all
And when push comes to shove
I will send a fully armed battalion to remind you of my love!”
- “You’ll be Back”, Sung by King George III – Hamilton: An American Musical
“I stopped caring about royal weddings in 1776” was an internet meme floating around all weekend, but the reality is that more than 29 million Americans tuned in to watch the Royal wedding between Prince Harry and American Meghan Markle over the weekend. Congratulations to the new Duke of Sussex, Earl of Dumbarton, Baron Kilkeel and the Dutchess of Sussex!
The China-United States trade war has been put on pause after high-level discussions resulted in a joint statement over the weekend saying “China will significantly increase purchases of United States goods and services”. With the U.S. trade deficit with China currently at $375 billion, a figure of $200 billion was floated by the Trump administration but no firm numbers have been released yet. Expect more saber rattling on both sides and expect trade skirmishes over the next decade as China continues to push their “Made in China 2025” initiative. If you’re not familiar with this initiative (the Chinese are famous for their long-term planning), “Made in China 2025” was initiated in 2015 as a blueprint to transform China into a technology powerhouse in industries such as information technology, artificial intelligence, robotics, aviation, and new energy transportation. They even have a page dedicated to this initiative on their official website. Why is this important? China doesn’t want to join the ranks of the U.S., Germany, Japan, South Korea, etc., it wants to replace them all as technology leaders. This is a radical shift from the decades ago “Made in China”.
The week ahead will be light with economic data and the FOMC minutes will be the highlight of the week. Investors have already priced in a June rate hike and now the tea leaves will be read to see if we get a total of three or four hikes in 2018.
Data deck for May 19 – May 25:
|
Date |
Indicator |
Period |
|
May 23 |
New Home Sales |
April |
|
May 23 |
FOMC Minutes |
---- |
|
May 24 |
Initial Jobless Claims |
---- |
|
May 24 |
Existing Home Sales |
April |
|
May 25 |
Durable Goods Orders (Preliminary) |
April |
|
May 25 |
University of Michigan Consumer Sentiment (Final) |
May |