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Aug 21 2018

8/21/18 Market Notes

Major U.S. stock indexes ended the day within 1% of their all-time highs, as expectations of renewed
trade talks between China and the United States and an absence of new controversy lifted investors’
spirits. The S&P climbed ¼%, bringing the indexes year-to-date return to 6.86%, and while the tech
heavy NASDAQ has struggled a bit as of late, its year-to-date return is nearly double that of the S&P,
standing at 13.29%.

On the economic front, the White House announced that it was not “anywhere close” to coming to a
new trade agreement with Mexico, contradicting statements made by White House economic advisor
Larry Kudlow as recently as last week. Additionally the WH indicated it would now focus its attention
to Canada, which it had placed on the back burner and indicated wasn’t a priority while negotiating
with Mexico. The change in strategy is a further indication of the complexities of trade negotiations.

Toll Brothers, one of the nation’s largest home builders, beat earnings estimates and raised its fullyear
outlook after the market close yesterday (Monday), citing strong prices and sustained high
demand for the positive outlook. This week’s home sales and price data will provide further insights
into the overall health of the housing market, which is critical to a healthy and vibrant economy.

U.S. stock futures are pointing to a higher open this morning, following the track of positive market
performance from Europe and Asia. The U.S. dollar is reversing earlier gains, falling to a 2 week low
against the Euro, while Treasury yields remain depressed ahead of this week’s Jackson Hole summit.

On the international front, the focus remains on Turkey and the Lira, after the Turkish Central Bank
issued new currency valued at 1/1000th of the previous denominations. The move was made in an
effort to curb hyperinflation, however experts agree that it is unlikely to be successful as this move
alone fails to address the underlying issues plaguing what only recently was one of the fastest growing
economies in Europe, fueled by heavy borrowing and low interest rates.



The GGFS Investment Committee