Congratulations US economy, chugging along at new market highs! These highs came on the back of low tariffs, low new unemployment claims, and low dollar.

Low Tarrifs

New tariffs were announced early last week. This typically would spur a negative response from markets, however this time, markets were pleasantly surprised. While the tariffs are not welcomed, they came in lower than expected. Markets appeared to be expecting a 25% tariff, but they landed at 10% until year end; at which time they rachet up to 25%. This lower level was seen as a positive as it would likely curb inflation and keep consumer spending on track.

Low Unemployment

Weekly new unemployment claims have been near historical lows over the last several months. This last week, new unemployment claims came in at 201,000 the lowest level since 1969 (a point in which the labor force was much smaller than it is today)! This means the unemployment claims represent a smaller fraction of the job force then it did in 1969.

Low Dollar

The dollar weakened last week–a move that has not been common as of late. With a strengthening dollar, our purchases of foreign goods go further. Additionally, US goods become less competitive internationally. The respite of the dollar advances was welcomed by the markets likely in hopes of a more competitive US product base.

In all, the news across the week led to less volatility and improved market conditions. Should trade outlooks in the US, China, UK, and the EU improve, so should the markets.

Your interest in our articles helps us reach more people.  To show your appreciation for this post, please “like” the article on one of the links below:

Facebook | Twitter | LinkedIn | Google+

FOR MORE INFORMATION:

If you would like to receive this weekly article and other timely information follow us, here.

Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long term holding strategy is the best strategy in any market environment.

Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.