August 7, 2019

Hello reader!

The month has started on a difficult note, as unexpected events related to the US-China trade dispute have taken center stage and pushed the market sharply lower.

The market was completely surprised by a 10% tariff imposition by the US administration and the Chinese authorities strong response by allowing its currency to float lower versus the US dollar and halting purchase of US farm goods. 

These significant events have transpired rapidly and the market outlook is now one of caution. However, some positives may emerge from the jolt. The sharp market decline and the adverse impact on the already weakening US and Chinese economies should create a sense of urgency to compromise and resolve the trade conflict. Also, the Federal Reserve will most likely have to cut the interest rate again at its next meeting on Sep 18 to limit the damage to business confidence and hold the economic cracks from widening and spreading fast. This is discussed here in greater detail. 

Volatility spikes in chaotic times as the first few days of August have already shown. We will continue to monitor the evolving situation and consider making intra-month adjustments to the model portfolio if the market conditions remain volatile and further deteriorate. 

For any questions, kindly contact us at support@GraycellAdvisors.com or use the Contact form.

Sincerely,
Graycell Advisors

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