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LOTS AND LOTS OF TRADE TALK: The European Union and the United Kingdom conducted Brexit negotiations all week. The parties claimed progress, but the issue of the Irish border continues to be difficult. They are working under a November deadline. France’s leader Macron is pushing other EU countries to make a deal with the U.K. Meanwhile, on Monday, the U.S. and Mexico struck a deal that paved the way to replace the North American Free Trade Agreement. The new deal will last 16 years with reviews every six years. Immediately after striking the deal, U.S. and Canadian negotiators got to work with no clear deal by the end of the week. Congress will certainly want to weigh in on these deals, so these will be interesting times.
TECH LEADS THE WAY: U.S. Stocks continued to climb with tech stocks continuing to soar. The NASDAQ Composite was up over 2% for the week and nearly 6% for the month of August. Overall, stocks responded well to the news that the U.S. economy grew faster in the second quarter than originally thought (see below) and to some progress in trade negotiations. Overseas markets did not keep up with generally negative numbers across the board. In China, worries about U.S./China trade and broader economic health concerns sent Chinese stocks lower. Some large emerging markets countries are mightily struggling with plunging currencies, namely in India, Argentina and Turkey. Europe continues to struggle with Italian budget problems, political turmoil and trade issues with the U.K.
REVISED GROSS DOMESTIC PRODUCT DATA: The U.S. Bureau of Economic Analysis released its revised estimate of economic growth (as measured by gross domestic product), and the revisions show that the economy grew at a 4.2% annual rate in the second quarter of this year, and at a 2.2% rate in the first quarter, both increases from earlier estimates.
EUROPEAN CONFIDENCE WANING: The European Commission’s index of household and business sentiment fell for the eighth consecutive month to its lowest level all year. Political risks and trade tensions continue to be the culprits.
U.S. CONFIDENCE SOARING: Meanwhile, the U.S. consumer confidence index tracked by the Conference Board hit its highest level since October 2000.
SPENDING INCREASING FASTER THAN INCOME: Household spending rose by 0.4% in July. Income rose by 0.3%. July spending was 2.8% higher than one year ago.