Global markets were rocked as the Trump administration proposed a new round of tariffs on Chinese imports. Should all of the potential tariffs be enacted, the amount of Chinese goods subject to tariffs will approach the total amount the U.S. imports from China each year. The President also threatened to impose a 20% tariff on cars imported from the EU. While the markets were focused on the escalating trade threats, the separation of immigrant families due to a zero tolerance immigration policy raised sweeping concerns accross the nation. These concerns resulted in a reversal of this practice. Also announced this week, after 110 years GE will be removed from the Dow.

Continuing the trend we have seen this year, U.S. small cap stocks were sheltered from the pullback resulting from the additional round of tariff threats. Large cap stocks dropped approximately 1% last week, as did developed international stocks. Emerging market stocks fell again – extending the pullback this year. The yield curve flattened on the long end as investors looked to lower risk. For most intermediate bond funds, this was a boost to returns last week. The lower yields on the long end of the curve were also a boost to publicly traded REITs – up 2% for the week and nearly 6% for the last month.

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