A strong month for tech stocks and more positive economic data bolstered U.S. equities in August despite continued trade uneasiness. The U.S. and Mexico appeared to have reached a trade agreement that will await approval by both governments. In the meantime, U.S. and Canadian officials have been working feverishly to incorporate Canada into the agreement. On the other front of global trade negotiations, the U.S. appears set to move forward with tariffs on $200 billion of Chinese imports in early September.

 

Amidst the trade uncertainty, the U.S. economy is still rolling with strong data released in August regarding the 2nd quarter. Corporate profits were 16.1% higher than the same period last year and GDP was revised up to a 4.2% annualized growth rate. The S&P 500, Nasdaq Composite and Russell 2000 all touched new highs.

 

Emerging markets have been hit severely by the situation in Turkey where the Turkish lira lost 25% of its value relative to the U.S. dollar in August. Investors worried about currency devaluation in other emerging markets pulled large investments out of these areas and drove the asset class generally lower. Compared to the U.S., less solid economic data abroad left international markets impacted by trade unease in August.