Mel's Blog

Foreign Ambiguity Influencing the US Economy

August 14th, 2017 11:09 AM by Mel Samick

Stocks slid last week in response to rising North Korean tensions. The heated rhetoric between the U.S. and North Korea pushed the S&P, Dow, and NASDAQ indexes to their worst weekly declines since March - falling 1.1 percent, 1.4 percent, and 1.5 percent, respectively. Bruce Bittles, Baird chief investment strategist rhetorically asked, “Are you going to raise interest rates in this environment?” referring to the weak inflation, CPI reports, and North Korea’s ostentatious behavior.
A Fed rate hike delay looks probable after July CPI rises less than expected. U.S. consumer prices rose slightly last month as rising food costs were offset by falling prices for a range of other goods, indicating benign inflation could make the Federal Reserve prudent in regards to raising interest rates again this year. With Consumer Price Index (CPI) edging up 0.1 percent in July, the year-on-year CPI increase rose to 1.7 percent, falling short of analysts’ forecasted 1.8 percent. Ultimately, the modest gain in consumer prices in addition to the drop in producer prices may prove worrisome to Fed officials, who have largely viewed the retreat in inflation as transitory.

A cafe in Australia charges 18 percent “man tax”. In recognition of Australia’s looming gender wage gap of 17.7 percent, the “Handsome Her,” a local cafe, decided to implement a fiscal model that charges males 18 percent more and ensures females receive priority seating. This “sir-charge,” if you will, is intended to bring to light the gender equality gap. Handsome Her reported that men supported the cause, applauding the message the store was striving to get across.

Job openings increased 5.7 million in June from May. Monthly jobs openings are considered a primary gauge of the U.S. economy. The Bureau of Labor Statistics announced last Tuesday the number of job openings in the U.S. hit a record high of 6.2 million - the highest reported since the Labor Department began tracking the series. Furthermore, reported hires and separations experienced little change - indicating signs of economic improvement.

Disney announced that it will launch its own streaming service, leaving Netflix on the sidelines. Last Tuesday, the Walt Disney Company announced it will be ending its deal with Netflix and head its own streaming service exclusively for ESPN (which Disney owns) come 2018. The streaming service will be built off of “BAMTech,” an MLB-founded video streaming platform. Disney has agreed to pay BAMTech an additional $1.58 billion in exchange for a 75 percent stake in the company. Promises of this incoming streaming service include “10,000 live regional, national, and international games and events a year,” alongside endless Disney and Pixar movies and television programming.

The opioid crisis has been declared as a national emergency. President Trump affirmed this past week that the opioid crisis needs to be treated as an urgent matter, making this matter the 29th active national emergency. He went on to explain, “We’re going to spend a lot of time, a lot of effort, and a lot of money,” on the opioid crisis. Considering this issue is of the likes which the U.S. has never experience before, a designation offering states and federal agencies more resources and power to combat the epidemic is in order.

The quite summer keeps humming along, the count down to the Holiday's begins in 2 weeks.

Mel
Information provided by NYCB Capital Markets
Posted in:General
Posted by Mel Samick on August 14th, 2017 11:09 AM

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