5 Best-Performing, No-Load Mutual Funds Of 2019 So Far

Even though U.S. equities have been performing well lately, concerns about a possible US-EU trade war definitely pose a threat to the U.S. economy. And let’s admit, Fed Chair Jerome Powell is currently contemplating a rate cut in the near term as he remains worried about trade uncertainties and global economic growth.

Given such concerns, investing in no-load mutual funds could be ideal.

Fears Over US-EU Trade War

On Jul 10, President Donald Trump ordered a probe into France’s proposal of taxes on large technology companies. The proposal, known as digital services tax, would inflict a 3% tax on total annual revenues of technology giants that offer digital services to French users.

Needless to say, the list of companies under this digital tax fire likely includes American tech giants such as Apple, Alphabet, Amazon and Facebook. The Section 301 investigation ordered by Trump could very well end in retaliatory tariffs and spark a trade war between the United States and European Union.

After all, the French digital tax isn’t the only reason for U.S. tariffs. EU aircraft subsidies, car imports and the Nord Stream 2 gas pipeline between Europe and Russia are a few other reasons why U.S. tariffs on EU could be on the way.

Fed’s Rate Cut Signal Indicates Weakening Economy

Despite rebounding consumer spending in the second quarter and a robust June jobs data, it is hard to ignore the slowdown in business investment, manufacturing activity and housing investment.

In fact, Fed Chair Jerome Powell’s testimony to the House Financial Services Committee and the Senate Banking Committee earlier this week clearly indicates a rate cut, probably in the FOMC meeting scheduled for Jul 30-31. Further, the CME FedWatch, which closely watches FOMC rate moves, is 100% expecting a quarter-point rate cut at the end of this month.

Powell cited that trade uncertainties and weakness in global growth continue to drag the economy. The rate cut is aimed to support the slowing economy, keeping in mind the trade disputes.

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