Newly elected conservative party head and U.K. Prime Minister Boris Johnson attended his first meeting of Parliament and took direct aim at the insufferable Labor party leftist, Jeremy Corbyn.  There’s been a lot of shaking things up in the first week…

Boris Johnson’s move into Downing Street has led to a surge in support for the Conservatives, an exclusive Mail on Sunday poll has found.  (read more)

President Trump spoke yesterday with Prime Minister Johnson on the phone.  The president relayed the phone call to the media when questioned:

THE PRESIDENT: Well, you know why your timing is good? Because I spoke to him about — how long have you been here? Sixteen minutes. I spoke to him 17 minutes ago. I hung up the phone as you were coming in.

And he’s a good guy. He’s a friend of mine. I think we’re going to have a great relationship. And Boris is going to be a great Prime Minister. I predict he will be a great Prime Minister. He has what it takes. They needed him for a long time. UK needed him for a long time. And —

Q Would you — would you invite him here?

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Earlier today President Trump sent a warning tweet about Apple possibly incurring tariffs on their products if they continue a plan for manufacturing in China.  Later in the day the president answered direct questions about those possible tariffs.
Additionally, Secretary Wilbur Ross was very insightful when he also spoke of the current U.S. perspective toward the U.S-China trade negotiation.  If you have followed the basic road-map of America-First, there’s a very clear picture; however, most pundits and trade analysts will likely ignore the message.

Subtle as a brick through a window…. yet it’s amazing how many people can’t see it.
Secretary Ross warned the professional investment class that the current objective for Secretary Mnuchin and USTR Lighthizer is to find out if Beijing is willing to re-engage from the starting point where they left-off when talks collapsed.  That’s a big tell.
After several phone calls and staff contacts if the U.S. team doesn’t know the answer to that question, well, there’s almost zero likelihood of any optimistic outlook.  In essence, the only value within the current engagement is financial ‘optics’ to stabilize markets.
It has been clear -validated by the G20 outcome- that President Trump is not going to accept anything less than a full and complete structural change in the U.S. trade position with China.  Lighthizer’s severe compliance and enforcement clauses, specific to each unique trade sector, are non-negotiable.
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During a surprise event on Friday President Trump invited the press into the oval office where Guatemalan Interior Minister Enrique Degenhart and acting DHS Secretary Kevin McAleenan were signing a joint asylum agreement.  The President then held a press conference filled with lots of news.

[Transcript] – THE PRESIDENT: Well, thank you very much for being here. We appreciate it.  I’m thrilled to be with a very important man in Guatemala, the Minister Enrique Degenhart. And we are doing a very important signing. It’s a historic asylum, or safe third, agreement between our two countries. A very important event.
We’ve long been working with Guatemala, and now we can do it the right way. It’s going to be terrific for them and terrific for the United States.
This landmark agreement will put the coyotes and the smugglers out of business. These are bad people. These are very, very bad, sick, deranged people who make a lot of money off other people’s miseries. It’s going to provide safety for legitimate asylum-seekers, and stop asylum fraud and abuses system.
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President Trump ‘unexpectedly‘ negotiated a major asylum deal with the government of Guatemala.  In a surprise announcement on Friday President Trump invited the press into the oval office where Guatemalan Interior Minister Enrique Degenhart and acting Department of Homeland Security Secretary Kevin McAleenan were gathered in advance.

It’s important to remember that President Trump spoke about this on Wednesday during an impromptu presser.  In essence President Trump delivered an offer/threat at the end of several months of negotiations.  REMINDER:

Q What are you going to do about Guatemala? Guatemala. What are you going to do about Guatemala?
THE PRESIDENT: So, Guatemala gave us their word. We were going to sign a safe third agreement and then, all of a sudden, they backed up. They said it was their supreme court. I don’t believe that. But they use their supreme court as the reason they didn’t want to do it.
So we’ll either do tariffs or we’ll do something. We’re looking at something very severe with respect to Guatemala. I’ve already cut all payments; I did that a year ago. I cut all payments going to Honduras, El Salvador, and Guatemala. We used to send them $500 million for nothing. For nothing. They didn’t do anything except set up caravans.
So, Guatemala we’re going to take care of and it won’t even be tough. We’re going to do — we’re looking at a couple of different things. ~ Wednesday July 24th, 2019.

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CNBC pundits use the drop in exports to attack the GDP result as Larry Kudlow appears to discuss the overall picture. The knuckleheaded pundits point to tariffs as the reason for the drop in exports without even contemplating (Mamet Principle) the devaluation and subsidies from foreign countries that have driven up the value of the dollar.
While currency manipulation/devaluing (EU and China) drops the prices of their export goods, their devaluation drives up the value of the dollar.  The first impact from a high valued dollar is that it causes our export products to increase in price.  This drops our exports, and can be a drag on the GDP growth rate.  Pundits are intentionally obtuse.

Commerce Secretary Wilbur Ross appears with Charles Payne to discuss the latest economic data and the Q2 GDP release.  Within the interview Secretary Ross explains the information behind the data; the status of the USMCA and Pelosi’s motives to delay ratification; the baseline for the U.S-China trade discussions, and the position of the administration to advance the economic interests of the U.S. above all others.

The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019.  The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.

The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.
The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook.  With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China).  This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.
The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy.  CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.
Wall Street wants bad news because Wall Street wants a lower fed rate.  As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”….    Sometimes you just have to laugh.
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President Trump called-in to Sean Hannity’s TV show tonight to discuss his perspective on the Robert Mueller testimony and current DC events.

Judiciary Committee Ranking Member Doug Collins and Intel Committee Ranking Member Devin Nunes appear on Fox News to discuss their perspective on Robert Mueller, the issues revealed by the testimony, and the behind-the-schemes maneuvers of the democrats on both committees.  It’s an interesting dual-interview.

The second quarter Gross Domestic Product growth result will be released tomorrow.  The Q2 GDP growth rate is historically the worst quarter of the year.  A growth rate higher than 1.5 percent will be a strong indicator the U.S. economy remains on track for a cumulative year of around three percent.

In the latest economic releases the orders for durable goods “unexpectedly” jumped in June [2 percent], again indicating the overall strength of the U.S. economy and strong consumer purchasing.  Additionally the trade in goods deficit “unexpectedly” declined 1.2 percent in June as more manufacturers “surprisingly” shift production back to the U.S, and domestic consumers are “unexpectedly” loyal to USA.
Every economic indicator is positive, and each series of released data shows the U.S. economy is increasingly strong.  Despite the empirical data, media reporting on economic forecasts continue to convey a negative slant disconnected from what is happening.

WASHINGTON (Reuters) – New orders for key U.S.-made capital goods surged in June, suggesting some improvement in business investment, but economic growth is still expected to have slowed sharply in the second quarter amid weaker exports and a smaller inventory build.

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