Weekly Market Commentary 08/03/2018

With the economy’s solid second-quarter performance now in the rear view mirror, all eyes are focused on the second half of the year. With it comes a host of questions. Will the momentum underpinned by the sturdy 4.1% growth rate in the April-June period be sustained? What would cause the Fed to stray from its gradual rate-hiking plan? How does the escalating trade war with China factor into the outlook; and will Trump’s détente with the EU forged last week hold? The answers to these and other sticky issues should become clearer as the summer wears on. Some no doubt will linger, particularly with regards to trade given the unpredictable behavior of the leading protagonist, whose tweets invoke more confusion than clarity about the administration’s approach towards trade policy.