The White House communicated mixed messages regarding an initiative intended to restrict China’s access to investment in U.S. technology companies. This added fuel to the tariff restrictions proposed in the prior week and sent the markets downward at the start of the week. The U.S. Supreme Court ruled in favor of the controversial travel ban imposed by the President indicating it was within the power of the Executive Branch to retain this right. Justice Kennedy also announced his retirement from the Supreme Court the – starting the nomination process for Trump’s second appointee since taking office. Overseas, Turkey’s Erdogan was reelected despite a strong opposition.

Stocks ended the first half on a down note with U.S. largest cap stocks generating a moderate 2.5% return. Small cap stocks had a runup of almost 10% year-to-date despite a pullback last week. International stock indexes were down year-to-date in part due to the uncertainty from the adversarial global trade environment. Bonds ended the first half of the year a bit stronger but were generally down on two rate increases. However, the rise in Treasury rates has been unevenly tilted toward the short end of the curve as investors sought long-term bonds to limit risk. Commodity returns are slightly down year-to-date as losses in metals and agricultural goods offset lumber and oil hikes.

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