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Aug 23 2018

8/23/18 Market Notes

Stocks teetered near the flat line with a tilt lower on Wednesday, as investors shrugged off the latest
scandal related to President Trump, instead focusing on strong earnings, in particular from Target
(TGT) whose shares rose more than 3% on strong sales and foot traffic. 2/3rd of the DOW stocks
ended in negative territory as market breadth continued to be overwhelmingly negative. Technology
stocks led markets higher again, as Microsoft (MSFT) gained more than 1%. The U.S. dollar resumed
its bull run, while oil prices were slightly lower and U.S. Treasury prices remained unchanged.

Late Wednesday evening China announced it would retaliate in kind against the United States, whose
new tariffs on $16 billion of Chinese goods take effect today. This time China is targeting steel
products, automobiles and medical equipment, instead of agricultural products as they did in the last
two rounds. Simultaneously, trade delegations from the U.S. and China are kicking off new
negotiations in Washington D.C. today, although few expect any breakthroughs or material advances
ahead of the scheduled December meeting between Trump and Xi Jinping.

European and Asian bourse are slightly higher in overnight trading, while U.S. equity futures are flat
ahead of the three day economic summit in Jackson Hole Wyoming. Monetary policy and trade will
be front and center at the summit as several key transportation companies, including naval shipping
and trucking are reporting pricing pressures as a result of the escalating trade disputes.



The GGFS Investment Committee