The trade war intensifies – What to know in the coming week

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<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Another crazy week in the markets sent the & nbsp ;Dow lost more than 600 points last Friday, as investors took into account the latest escalation of the trade war between the United States and China. This week should be another busy day for the markets. "Data-reactid =" 15 "> Another crazy week in the markets drove down the Dow by more than 600 points last Friday, as investors viewed the latest escalation of the US-China trade war : this week should be another busy day for the markets.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In the current state of things, the president Donald Trump on Friday & nbsp;triggered another rise on the tariff rate& nbsp; for some Chinese products. This announcement came after China announced Friday its intention to impose new duties on US imports worth $ 75 billion – an initiative that was in itself a response to tariffs. previously announced by the Trump administration and expected to come into force in September and December. "In the current state of affairs, President Donald Trump announced Friday a further rise in tariff rate on some Chinese products.This announcement was made after China announced Friday its intention to impose new tariffs to $ 75 billion US imports – an initiative that was in itself a response to the rates previously announced by the Trump administration which were to come into effect in September and December.

"This illustrates the speed with which the trade war intensifies and that it is impossible to know where it will end," said Paul Ashworth, chief US economist at Capital Economics, in a note. "Fears about the evolution of the trade war will weigh even more heavily on financial markets and business investment in the months to come – and that's where the real damage will be done to the US economy. . "

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Indeed, the spokesperson of the White House, Stephanie Grisham, said Sunday this asset "regrets not having increased tariffs. "" Data-reactid = "18"> Indeed, White House spokeswoman Stephanie Grisham said Sunday that Trump "regretted not having increased tariffs."

Investors will closely monitor the trade situation and gather new economic data from the US to determine whether this trade has weakened some of the last bastions of the strength of the national economy.

Recent data has pointed to a bifurcation of the US economy with the slowdown in the trade-sensitive manufacturing sector, while the consumer-oriented service sector has held up better.

US President Donald Trump gestures during a family photo shoot at the G7 summit in Biarritz, France on August 25, 2019. REUTERS / Christian Hartmann / Pool

"The next activity data for July will likely highlight the divergence between the struggling manufacturing sector and resilient consumers, as core durable goods orders are retreating, but real consumption is growing at a sustained pace," Andrew Hunter said. , a senior US economist at Capital Economics, wrote in a note on Friday.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Indexes of manufacturing activity in federal reserves Both Dallas and Richmond are expected to post negative readings again for August, although they are slightly lower than in July, and these surveys closely follow & nbsp;Markit IHS report& nbsp; Last week, manufacturing activity in the United States slowed down and fell back in August, reaching its lowest level in nearly 10 years. "data-reactid =" 33 "> Dallas and Richmond Federal Reserve Manufacturing Activity Indexes Should Post Negative Results These surveys follow a report released last week by IHS Markit, which showed that Manufacturing activity in the United States slid into a contraction zone in August, reaching its lowest level in nearly a decade.

In addition, consensus economists should have seen slower growth in their orders for durable goods, or manufactured goods, expected to last at least three years. And orders for non-defense equipment, excluding aircraft, are expected to be stable in July. These orders are generally considered as an indirect indicator of future business investment. Data on orders for durable goods and equipment should be released Monday.

Economists have made it abundantly clear that trade uncertainty has hurt corporate visibility, preventing them from engaging in capital projects and developing plans to strengthen their operations.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" This is partly the reason why we see the discrepancy between what is happening with investment, where you see that investment is very small, as opposed to consumer spending, which is much healthier, "chief economist of the International Monetary Fund , Gita Gopinath said in an interview with Yahoo Finance& nbsp; last week. "Data-reactid =" 36 "> This is partly why we find a discrepancy between what is happening with the investment, where you see that the investment is very small, by Opposition to consumer spending, which is much healthier "The chief economist of the International Monetary Fund, Gita Gopinath, said in an interview with Yahoo Finance last week.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But the consumer remained a stronger part of the L US economy, as reflected in retail sales figures exceeding July estimates, as well as better than expected retailer results, including Target (TGT) and Walmart (WMT) data-reactid = "37"> But the consumer has remained a more important part of the US economy, as shown by retail sales in excess of July's estimates, as well as better than expected retailer results, notably : Target (TGT) and Walmart (WMT) this season of results.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Economists expect the second Printed in the second quarter The US gross domestic product, to be released Thursday, will confirm this position. 2.1% in the second quarter, exceeding expectations. This is explained by the much better-than-expected Personal Consumption Expenditures (PCE), which rose 4.3%, a record for six quarters. "Data-reactid =" 38 "> Economists expect the second publication in the second quarter in US dollars. The gross domestic product, to be released Thursday, confirm this position. 2.1% growth in the second quarter, exceeding expectations, with much better-than-expected Personal Consumption Expenditures (PCE), which increased 4.3%, the highest in six quarters.

Consensus economists expect the second impression to indicate that the US economy grew 2.0% in the second quarter, slightly lower than the first impression. ECP should not be revised, however.

Earnings calendar

On Monday: N / A

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tuesday: J.M. Smucker (LSU) before the opening of the market; Hewlett Packard Enterprise Company (HPE), Autodesk (ADSK) after the close of the "data-reactid =" 46 ">Tuesday: The J. Smucker Company (SJM) before the opening of the market; Hewlett Packard Enterprise Company (HPE) and Autodesk (ADSK) after market close

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Wednesday: Coty (COTY), Tiffany (TIF), Brown-Forman Corporation (BF-B) before the opening of the market; H & R block (HRB), PVH (PVH), Okta (OKTA) after the closure of the "data-reactid =" 47 ">Wednesday: Coty (COTY), Tiffany (TIF), Brown-Forman Corporation (BF-B) before market opening; H & R Block (HRB), PVH (PVH), Okta (OKTA) after the close of the market

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Thursday: Dollar tree (LTRD), Dollar General (DG), Best Buy (BBY) before the opening of the market; Ulta (ULTA), Working day (Day) after the close of the "data-reactid =" 48 ">Thursday: Dollar Tree (DLTR), Dollar General (DG), Best Buy (BBY) before market opening; Ulta (ULTA), Workday (WDAY) after the close of the market

marketFriday: Campbell Soup (CPB) before the opening of the market

Economic calendar

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "On Monday: Chicago Fed National Activity Index, July (-0.02 before); July durable goods orders, preliminary (1.3% forecast, 1.9% previously); Non-defense equipment orders, excluding aircraft, preliminary July data (0.1% forecast, 1.5% previously); Dallas manufacturing activity index, August (-1.0 expected, -6.3 before) "data-reactid =" 51 ">On Monday: Chicago Fed National Activity Index, July (-0.02 before); July durable goods orders, preliminary (1.3% forecast, 1.9% previously); Non-defense equipment orders, excluding aircraft, preliminary July data (0.1% forecast, 1.5% previously); Dallas manufacturing activity index, August (-1.0 expected, -6.3 before)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tuesday: FHFA housing purchase index, 2nd quarter (0.2% forecast, 1.1% previously); Composite price index S & CoreLogic CS 20-City, MoM (0.20% expected, 0.14% previously); Manufactured Manufacturing Index in Richmond, August (forecasted 2, -12 before); Conference Board consumer confidence (130.0 expected, 135.7 before) "data-reactid =" 52 ">Tuesday: FHFA housing purchase index, 2nd quarter (0.2% forecast, 1.1% previously); S & P CoreLogic CS 20-City Composite Price Index, MoM (0.20% expected, 0.14% previously); Manufactured Manufacturing Index in Richmond, August (forecasted 2, -12 before); Conference Board Consumer Confidence (130.0 expected, 135.7 before)

Wednesday: MBA Mortgage Applications, Week Ended August 23 (-0.9% Before)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Thursday: Quarterly annualized GDP, second impression (2.0% forecast, 2.1% previously); Personal consumption in the second quarter, second impression (4.3% forecast, 4.3% previously); Second quarter GDP price index, second impression (2.4% forecast, 2.4% previously); Basic PQ 2Q QoQ (previously 1.8%); Advance sales of merchandise sales, July (- $ 74.0 billion forecast, – $ 74.2 billion previously); Wholesale inventories, July, preliminary data (previous 0.0%); Initial applications for unemployment, week ended August 24 (209,000 before); Persistent claims, week ended August 17 ($ 1.674 million before); MoM, July (predicted 0.0%, 2.8% previously) "data-reactid =" 54 ">Thursday: Quarterly annualized GDP, second impression (2.0% forecast, 2.1% previously); Personal consumption in the second quarter, second impression (4.3% forecast, 4.3% previously); Second quarter GDP price index, second impression (2.4% forecast, 2.4% previously); Basic PQ 2Q QoQ (previously 1.8%); Advance sales of merchandise sales, July (- $ 74.0 billion forecast, – $ 74.2 billion previously); Wholesale inventories, July, preliminary data (previous 0.0%); Initial applications for unemployment, week ended August 24 (209,000 before); Persistent claims, week ended August 17 ($ 1.674 million before); Pending home sales, July (0.0% expected, previously 2.8%)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Friday: Personal income, July (0.3% forecast, 0.4% previously); Personal expenditure, July (0.5% forecast, 0.3% previously); PCE Deflator, July (0.2% expected, 0.1% previously); PCE Deflator YoY, July (1.6% expected, 1.6% previously); Chicago PMI – NMI, August (48.0 expected, 44.4 before); University of Michigan Sentiment Survey, last August (92.5 expected, 92.1 before) "data-reactid =" 55 ">Friday: Personal income, July (0.3% forecast, 0.4% previously); Personal expenditure, July (0.5% forecast, 0.3% previously); PCE Deflator, July (0.2% expected, 0.1% previously); PCE Deflator YoY, July (1.6% expected, 1.6% previously); Chicago PMI – NMI, August (48.0 expected, 44.4 before); University of Michigan Sentiment Survey, last August (92.5 expected, 92.1 before)

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck"data-reactid =" 57 ">Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck

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