Permit me a few thoughts on matters well outside the local market – namely tariffs and trade with China.

Macroeconomic theory holds that the equilibrium-price between trade partners can be found – and even be relatively stable – despite trade tariffs when the market can address currency valuation between the partners. That is, the market can adjust the relative value of the trade partners’ currencies to adjust for the tariff headwind. See here, e.g.

That theory runs into issues when the currency of a trade party is not necessarily subject to market forces. (China, anyone?) But see this.

I attended a market update sponsored by SouthWest Bank this week. Their economist presenter insisted that China had no choice but to blink in the current troubles. Recent reports seem to support this view. WSJ analysis shows that US Firms are building up inventory in the face of looming tariffs (US Section, Chart 2). This is understandable. But what is more notable is the apparent view of the tariffs from the other side of the table. It seems that producer sentiment is divergent – with Chinese counterparts being markedly less confident that their future is bright in a tariff environment. (Same link, US Section, Chart 5.) Perhaps this is a signal that the SouthWest Bank presenter is correct.

Back to local. Looking at our Mover-Moving indicator for September 2018, we saw 114 transactions that meet our criteria. See attached. This is a healthy number for this part of the year.