Financial markets are essentially betting parlors.  Mohamed El Erian is considered to be one of the better, perhaps currently the best/most influential, financial market analysts in the world.   What El Erian outlines is something we have discussed at great length.

“When people realize that at the end of the day, the U.S. will prevail, because [China] is a less open economy, because [the U.S.] is a more dynamic economy, that ultimately you may end up in a situation where the U.S.’ position in global economic terms is better off.”

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The multinationals (corporations and financial entities) don’t like President Trump; nor do they like any politician who expresses economic nationalism – with the exception of Chinese President Xi Jinping, whom they had been using as the fulcrum for their investment betting on the U.S. as following a service-driven economic model.
Trump has crushed that fulcrum.  The economic globe is in a state of flux while it resets to the natural fulcrum with the U.S. as the centerpiece.  Previously we have explained the dynamic of this flux-time as the space between two economic engines.  Only President Trump could pull off this reset… his plans therein were assembled over decades.
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British leader of Brexit, Nigel Farage, appears on Fox News Morning to discuss the ongoing visit by U.S. President Donald Trump and the issues surrounding a bilateral U.S./U.K. trade deal.

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EU Parliament member Daniel Hannan discusses the background of Prime Minister May’s inept approach toward exiting the EU; her future, and the future of the Brexit process, and President Trump calling out NATO allies.

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Methinks this NATO summit will be very interesting…
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Stunningly confrontational remarks today from EU President Donald Tusk as U.S. President Trump and First Lady Melania arrive in Brussels for a NATO summit.
After destroying nationalistic Brexit plans for the U.K. to exit the European Union, the insufferable arrogance of the EU surfaces with pontificating snark.
The EU might feel emboldened right now, but this approach will not end well; believe me.

Brussels – Speaking on the eve of the NATO summit here in Brussels, I would like to address President Trump directly, who for a long time now has been criticising Europe almost daily for, in his view, insufficient contributions to the common defence capabilities, and for living off the US.
Dear President Trump: America does not have, and will not have a better ally than Europe. Today Europeans spend on defence many times more than Russia, and as much as China. And I think you can have no doubt, Mr President, that this is an investment in common American and European defence and security. Which can’t be said with confidence about Russian or Chinese spending.
I would therefore have two remarks here. First of all, dear America, appreciate your allies, after all you don’t have that many. And, dear Europe, spend more on your defence, because everyone respects an ally that is well-prepared and equipped.

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It is more than likely President Trump and Commerce Secretary Wilbur Ross knew this was in the making several months ago.  In hindsight it now appears Germany presented a false proposal to U.S. Ambassador Richard Grenell intentionally to poke him in the eye.
Germany has sealed the fate of their auto-industry with a multi-company agreement to manufacture vehicles in China and share all their intellectual processes therein.

FRANKFURT (Reuters) – German companies signed a series of agreements with Chinese partners at a meeting of Chancellor Angela Merkel and Prime Minister Li Keqiang in Berlin on Monday, according to a document seen by Reuters. Following are details of them:
♦BASF signed a Memorandum of Understanding (MoU) with China’s Guangdong Province to look at building a highly-integrated chemical production site there, BASF said.

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White House Office of Trade and Manufacturing Policy Director Peter Navarro appeared on Fox Business last night to outline the U.S. position in the ongoing trade reset against communist China.  Almost all of the financial media and economic punditry are intentionally obfuscating the underlying nature of China’s economic model.
China is a communist central government controlled economic system.  Free-market principles do not apply when dealing with China; therefore trade strategies based on ‘free markets’ cannot succeed against the centralized planning of a communist regime.

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The Bureau of Labor Statistics presents the latest snapshot of jobs and employment.  According to the BLS data, behind the 213,000 jobs added, the most significant gains all center around growth in durable goods, manufacturing, transportation/distribution and the ancillary business services directly connected to the blue collar sector.
In addition, April was revised up from +159,000 to +175,000, and the change for May was revised up from +223,000 to +244,000. With these revisions, employment gains in April and May combined were 37,000 more than previously reported.

In the macro-review things are looking great; however, when you go into the micro-review you discover things are even better, they are MAGAnificent.
To understand what is happening we must all remember the Trump MAGAnomic policies are geared toward enhancing the creation of “goods”; the production of physical “stuff”; the manufacturing and durable good sector; or put another way: Main Street/Blue Collar work.   MAGAnomic policy is geared toward expanding the production base of the U.S. economy.  Therefore all majority benefit will be necessarily attached to those workers and industries that are part of the expanding production base.
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For more than three decades all U.S. economic policy has been elevating Wall Street and diminishing Main Street. As a result blue-collar workers have not had wage gains keeping up with inflation for over 30 years…. Then came the era of Trump.

– “Walking in a Winner Wonderland” –

More than two years ago CTH began discussing the ramifications to a new emphasis on the economy outlined as a possibility of candidate Donald Trump’s economic policy outlook. Within the overall discussion we walked through the anticipated changes possible if A.) Trump won the election, and B.) Trump began instituting Main Street economic policy ahead of Wall Street policy (the past 30+ years).
We discussed the new dimension that would occur between two economic engines (Main Street -vs- Wall Street) as three decades of policy shifted. CTH outlined statistical and measurable KPI’s that would become visible in the space between the policy shifts.
Part of those discussions focused on energy costs, product costs (we explained how inflation would be weird), and importantly, wage rates. It takes several months of policy emphasis (actual outcomes), before the labor market wage rates would grow. We anticipated seeing that impact in Q2 of 2018, which is April-June 2018.  Well:

(Via CNBC) […] The Bureau of Labor Statistics reported that April closed with 6.7 million job openings. May ended with just over 6 million people the BLS classifies as unemployed, continuing a trend this year that has seen openings eclipse the labor pool for the first time. At some point that gap will have to close. Economists expect that employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives.

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Last month the White House presented a 36-page outline of the U.S. position toward trade with China (full pdf below).  White House National Trade Council and Office of Trade and Manufacturing Policy Director Peter Navarro delivers a presentation to discuss that report.  Very well worth watching:

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Report below:
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Pontificating economic globalists are stuck between empirical good news and their preferred anti-Trump tariff narrative.  Economic media like the Wall Street Journal are filled with angst, as Trump’s manufacturing MAGAnomics continues to destroy their decades-long talking points and globalist preferences.

The analysis of June factory and manufacturing indicators from the Institute for Supply Management (ISM) highlight an expanding reality: increased production, increased new orders, increased employment, and demand outpacing supplies and transportation capacity.  Yes, all of this means the Main Street U.S. economic engine is firing on all cylinders.  We can only imagine what the Q2 numbers will reflect when it’s all rolled up.

ISM DATA – “Comments from the panel reflect continued expanding business strength. Demand remains strong, with the New Orders Index at 60 percent or above for the 14th straight month, and the Customers’ Inventories Index remaining low. The Backlog of Orders Index continued to expand, reading at 60 percent of higher for the third consecutive month. Consumption, described as production and employment, continues to expand in spite of labor, skill and material shortages.

What does this mean in blue collar language?  Short term: OVERTIME pay folks…. maximum earnings possibilities as demand for factory and manufacturing has all employment working maximum production shifts. Long term: upward wage pressure, jobs, jobs, jobs.
For the Truck Drivers?  Work, work, work.  You got a rig, they need it hauled. Everywhere.
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