Author Archives: Rick Pendergraft

China’s Central Bank Deviates From Course

The People’s Bank of China, the central bank of China, had been tracking the United States’ Federal Reserve when it came to rate adjustments. When the Fed hiked rates, the PBOC hiked rates. But the PBOC didn’t hike rates two weeks ago when the Fed made its latest 0.25% bump to the Fed Funds rate. Why did they deviate from ...

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Newton’s Third Law at Work in the Trade Dispute

When Harley Davidson (NYSE: HOG) announced that they were moving some production overseas due to the proposed tariffs from the European Union, President Trump tweeted that he was surprised by the move. He also criticized the company and went so far as to say that it would be “the beginning of the end” for the company. It really shouldn’t come ...

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At Least One European Group Agrees With Trump Trade Ideas

Since President Trump launched his campaign to level the playing field in international trade, there has been a tit for tat between world leaders and the key players in the trade war. The U.S. President hasn’t found much support from foreign leaders—political or business. But he has had one prominent European group announce that they agree with him. German automakers ...

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GE’s Demise: Unsustainable Business Model or Changing Times?

When I saw the news that General Electric (NYSE: GE) would be replaced in the Dow Jones Industrial Average by Walgreen’s Boots Alliance (NYSE: WBA), it made me think about how much GE has fallen in the last 17 years. Not just how much the stock price has fallen, but in terms of the importance of the company and the ...

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Housing Industry In The Spotlight This Week

The week ahead is pretty light on economic reports, but there are a few that will be closely watched. A number of the reports that are due out involve the housing industry. We are scheduled to see six different housing industry reports during the week including housing starts and existing home sales for May. Of the reports that have analyst ...

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The Fed is in a No-Win Situation

When the Fed raised rates on Wednesday and changed its outlook to include two more rate hikes for 2018, the decision was met with some concern. The market sold off after the decision and statement as investors feared the rate hikes could be too much and the possibility that the action would cause the yield curve to invert. While those ...

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Inflation At Six-Year High and Could Keep Going

One of the reasons the Fed has been raising interest rates is to keep inflation in check. Earlier this week the Consumer Price Index showed that prices at the consumer level increased by 0.2% in May. The report also showed prices were up 2.8% over May 2017 and that is the highest year over year rate since February 2012. This ...

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Huge Week for Central Bank Activity

The historic summit between President Trump and North Korea’s Kim Jung Un in Singapore is going to garner a great deal of attention in the next few days. While it will definitely have an impact on financial markets around the world, don’t forget about the Fed meeting that concludes with a rate decision on Wednesday. In addition to the Fed ...

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Consequences of Tax Cuts Starting to Impact Markets

When the changes to the tax rates were approved in Congress last year, I voiced my concerns about possible unintended consequences. One major concern was the one-time special treatment for companies to repatriate overseas assets back into U.S. dollars and how that would drive the dollar higher against other currencies. The rally in the dollar didn’t take place immediately, but ...

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