Overview: U.S.-China trade tensions continued to dominate headlines this past week. China announced tariffs of 5% to 10% on $75 billion of goods, including autos and oil. The U.S. retaliated on Friday with higher tariffs, sending domestic stocks sharply lower. The S&P 500 finished the week down about -1.4%, while international stocks recorded marginally positive returns for the week. Interest rates continued to fall, with the 2-year and 10-year Treasury notes finishing the week at 1.52% and 1.53% respectively. Investors now have an eye on geopolitical developments, news from the central bankers’ meeting in Jackson Hole, and developments from the G7 meetings in France.
Looking forward: As we enter the last trading week of August ahead of the long Labor Day weekend, markets will likely remain focused on the latest trade developments and expectations of third quarter earnings announcements. It will be a full week of economic data, including a report on durable goods orders, personal income and spending, and the latest estimate for second quarter GDP on Thursday, expected to be 2.0%.
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