Good morning. Here’s your Early Warning for Wednesday, 19 September 2018. (All times Central.)
The President is scheduled to travel to Marine Corps Air Station Cherry Point in North Carolina to survey damage from Hurricane Florence.
Secretary Pompeo is scheduled to meet with the secretary of national defense for the Philippines. The meeting is closed to the press, so talks will likely center on U.S. foreign policy against China in the south Pacific region.
Defense Secretary Mattis is traveling. Reporting from last month indicated that he’d be making trips to Europe and the Indo-Pacific this month.
Of Note: Consistent with previous reporting, the Pentagon is “very seriously” examining options to put a permanent U.S. military presence in Poland. After talks yesterday, Polish President Andrzej Duda floated the idea of calling the U.S. base “Fort Trump”. Polish officials reported that they’d pay $2 billion to build the base for U.S. forces.
There has been no significant change in deployments of U.S. carrier strike groups. Conflict requiring an aircraft carrier/carrier strike group not appear imminent.
The Carl Vinson (CVN-70) was last reported as being in port of San Diego.
The Abraham Lincoln (CVN-72) was last reported as being in port at Norfolk.
The John Stennis (CVN-74) was last reported as having returned to port in Bremerton, WA.
The Harry Truman (CVN-75) was last reported as being in the north Atlantic.
The Ronald Reagan (CVN-76) was last reported as having participated in Valiant Shield 2018 around the Marianas Islands Range.
The George H. W. Bush (CVN-77) was last reported in the western Atlantic after leaving port at Norfolk to evade Hurricane Florence.
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- Nothing significant to report.
* Only events pertinent to national security are listed.
– Yesterday, President Trump went ahead with additional tariffs on Chinese goods. China levied it own tariffs in response. On Monday, we reported that a group of Wall Street bankers were in Beijing for meetings with Chinese officials. The Chinese actually called that meeting as part of their strategy to enlist the help of powerful and influential U.S. financial executives to push back against the Trump tariffs. One additional note: Chinese holdings of U.S. Treasury bills dropped to a six-month low in July, according to the latest data available. That’s a trend that could continue as a Chinese response to its limited reach in imposing its own tariffs.
– Reports indicate that Goldman Sachs is now purchasing sovereign debt in hard-hit Turkey and Argentina and cutting their exposure to U.S. equities, marking a shift in strategy. That’s a good indicator that they see more upside abroad, and could expect U.S. markets to underperform or decline. It’s not just Goldman, though. Some JPMorgan Chase strategists are also suspicious of future U.S. growth as the upside effects of the Trump Bump and tax cuts slow down. Several other analysts have called a top in U.S. markets (though one analyst said the secular bull market had another 7-8 years left in it). I’ll keep an eye on who else is signalling a shift in growth expectations by moving money out of U.S. equities.
The section above references news and opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
HurricaneWatch: For the first time in weeks, there’s nothing significant to report.
REMINDER: This hurricane watch section will remain in this report through the end of the season. I check the latest from the National Hurricane Center each morning and will provide details as necessary.
Drought conditions persist across much of the Southwest. This map is updated every Thursday.
What I’m Looking at this Morning