The long awaited trade bantering came into effect on July 6th at $34 billion of Chinese goods with another $16 billion potentially effective in two weeks. China reacted immediately with retaliatory tariffs on 545 goods ranging from agricultural products to vehicles; the proposed amounts are far higher but we will see if we reach such levels. The jobs report on Friday helped boost investor sentiment and gloss over the trade disputes adding 213,000 positions in June which continued the longest job expansion on record for the domestic economy, 93 straight months. The jobless rate unfortunately ticked up to 4.0% however this is still a significantly low level.

A shortened trade week due to the U.S. holiday, Independence Day on July 4th, showed markets gained despite the geo-political environment which could hinder growth. The U.S. large and small company indices led the charge with strong weekly gains, the latter trouncing the former. International developed and emerging countries showed some resilience albeit not nearly having the advance as domestic stocks. A reasonably unchanged yield curve from a month earlier offered fixed income investments some reprieve as they added and took down their YTD losses some. Commodities were the worst performer as some individual goods will be effected by the tariffs.

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