Market Update | June 20, 2018

Macro View

Daily Insights

  • Tariff headlines versus implementation. While trade headlines have garnered a lot of attention, and roiled markets in some instances, it’s important to reiterate that neither side wants a trade war. The tit-for-tat we’ve seen over the past few months may be more aptly viewed as the U.S. and China feeling each other out to better understand the other’s pain points as they (hopefully) progress towards a more mutually beneficial relationship as major trading partners. Looking back at some of the recent back-and-forth may help put the most recent $200 billion announcement into perspective. But first it’s important to remember that there’s typically ~60 days from the announcement to imposition of the tariffs, intentionally leaving time for reaction, negotiation, and adjustment. In March, it started with import taxes on steel and aluminum, with no stated target value, before targeting sanctions on one of China’s largest telecom firms on national security grounds; then Treasury Secretary Mnuchin announced the “trade war” was on hold late last month as negotiations continued and China agreed to buy “significantly more” from the U.S. Importantly, these jabs are not intended to be knock-out punches, and though the dollar value of the latest announcement is higher than previous iterations, it’s still small relative to the size of the economies in question.
  • Global central banks back in focus. After global central bankapalooza last week, discussed in our latest Bond Market Perspectives publication, today Jay Powell, Mario Draghi and Haruhiko Kuroda are taking part in an ECB-sponsored policy panel in Portugal. The themes are prices and wage-setting but investors will be watching for any hints on Powell’s commitment to four Federal Reserve rate hikes this year, insight into the flexibility of Draghi’s plan to wind down stimulus (the so-called “dovish taper”), and Kuroda’s views on whether Japan can sustain higher inflation. Given the impact of tariffs on prices, global trade tensions will surely come up.

Monitoring the Week Ahead

Click Here for our detailed Weekly Economic Calendar




  • Markit Mfg. PMI (Jun)
  • France: GDP (Q1)
  • France: Markit Mfg. PMI (Jun)
  • Germany: Markit Mfg. PMI (Jun)
  • Eurozone: Markit Mfg. PMI (Jun)


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All performance referenced is historical and is no guarantee of future results.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured.  These products are not Bank/Credit Union obligations and are not endorsed, recommended or guaranteed by any Bank/Credit Union or any government agency.  The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.


For Public Use – Tracking # 1-742217 (Exp. 6/19)