Three Things to Watch
- Geopolitics will be in the headlines this week as President Trump hosts Chinese President Xi Jinping at the White House on Thursday and U.S. and Chinese officials meet in New York. Likely topics will include trade and investment, artificial intelligence and the war in Iran.
- The University of Michigan consumer sentiment data will be released Friday, along with one- and five-year inflation expectations. In recent months, sentiment has turned down while expected inflation has increased. The reading on consumer sentiment hit a record low earlier this year, which is somewhat surprising with the S&P 500 near record highs and up over 10% year to date.
- Global bond markets remain in focus. The U.S. 10-year Treasury yield finished last week hovering near 5% while shorter-maturity Treasury yields are moving higher on bets the U.S. Federal Reserve will continue to raise rates. The two-year note is currently yielding 4.75%.
Three Things to Know
- After last week’s Federal Open Market Committee meeting, futures are now priced for four additional interest rate increases over the next 14 months, for a total of an additional 100 basis points. (Source: Bloomberg)
- In addition to oil prices rising, the costs to ship crude oil are surging. The cost to ship 2 million barrels of crude oil from West Africa to China is now up to $23.59 per barrel. To put this into perspective, in July, the cost for the same shipment was $6.50 per barrel. That’s a 258% surge in shipping costs in just two months. (Source: The Kobbeissi Letter)
- U.S. diesel prices rose to a fresh record high of $6.49 per gallon and have now hit a new record for 12 straight days. This officially puts diesel prices up 100% from their low seen in January, just nine months ago. California continues to face the highest average diesel price, at a record $8.41 per gallon, with its average gas price up to $6.14 per gallon. (Source: The Kobbeissi Letter)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.
5943696- EXP: 09/30/2029