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Markets Shrug off Politics, Concentrates on Trade

What a difference a day makes. Yesterday, the combination of a weak consumer confidence report, the potential opening of impeachment hearings and US/China trade uncertainty (the cancelling of the Chinese delegation’s farm tour) caused investors to run into safe assets. The 10 year T dropped to 1.63%. The consumer weakness is especially significant: in recent months manufacturing and corporate investment has been lagging due to trade uncertainty while US consumer activity has been the critical bright spot. With holiday shopping season almost upon us (doesn’t it get earlier every year?), consumer behavior will be critical and closely watched. Today, all that was in the rear view mirror. This morning the markets were seemingly unconcerned about developments in Washington. Instead investors were concentrating on indications that a trade deal is (again) close at hand with news of imminent agricultural purchases of US farm products by China.  The 10 year T jumped to 1.74% as stocks rallied. At GSP we are seeing a glut of fixed rate loan requests as borrowers are rushing to lock in historically low rates. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners