Penn Wealth Publishing

2018.09.02 Penn Wealth Report Vol 6 Issue 03

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02 Sep 2018 penn Wealth RepoRt volume 6 iSSue 03 5 Penn Wealth RePoRt Copyright 2018. All Rights Reserved. Charts tell the story. Here are some of our favorites from recent days. For the top business and economics stories of the week, visit Penn...After Hours at www.penneconomics.com. the Week in ChaRtS Viva la Mexican trade deal Gold falls, dollar strengthens Hurt by stalled trade talks? We used to get mad at the false narratives created in the media; now we use them to make money. The talking point among the talking heads has been how stalled trade talks hurt the US more than China. Oh really? That doesn't quite add up when you look at how the S&P 500 has performed YTD as compared to the Shanghai Composite Index. While the US benchmark was rising 8.46%, the Chinese benchmark was falling 16%. While it is not always the case, the US dollar and gold are typically inversely correlated: the price of gold falls when the dollar strengthens. That has certainly been the case year-to-date. With the strong US economy, the dollar has been strengthening; mean- while, gold has fallen 12% since it topped out in the middle of January. We expect the US dollar to retain its strength over the next year. Don't believe otherwise—the US/Mexican trade deal was a huge win. Just ask Kansas City Southern, the "NAFTA railroad." The com- pany, which transports an enormous amount of goods between the US and Mexico, gapped up immediately after announcement of the trade agreement.

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