U.S. employment and wage growth data were strong this week on top of the 4.1% real GDP growth report reported last week. Although we are seeing signs that inflation and wages are picking up, the Federal Reserve Open Market Committee showed patience and left the key federal funds target range of 1.75%-2.0% unchanged. Overseas, the Bank of England took a widely anticipated step to raise its key rate to 0.75%. Continuing to raise the trade stakes, China proposed tariffs on a cumulative total of $110 billion in U.S. goods. China is also employing steps to restrict investors from taking bets against the sliding Yuan.
U.S. large and small cap stocks, buoyed by the stronger earnings reports and data, were both up approximately 1% for the week. Apple’s reports helped push the large cap indexes higher with earnings that exceeded expectations and its market cap pushed to a record one trillion dollars. After a brief reprieve last week, international stocks ended the week lower – presumably as investors continue to have concerns about the global impact of the ongoing trade wars. The 10 Year U.S. Treasury note hit the 3% level again this week before settling in to end the week at 2.95% leaving bond funds largely unchanged.
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