North Korea’s test detonation of a hydrogen bomb made investors nervous early in the week and markets turned bearish on Tuesday. However, the nervousness faded the next day as investors realized that despite heated rhetoric from a pugnacious White House, in the words of Trump’s former Chief Strategist Steve Bannon, there is probably “no military solution” to the North Korea situation.
While factory orders took a nosedive in July, the non-manufacturing segment of the U.S. economy had a 92nd consecutive month of growth, which further helped to calm the markets by midweek. Meanwhile, President Donald Trump stunned the Republicans by accepting a mere 3-month extension on the debt ceiling from Democrats to facilitate emergency aid for hurricane Harvey victims.
As policymakers in Washington were just catching up to the damages done by hurricane Harvey, they had to divert attention to prepare for hurricane Irma, which has already claimed around ten lives in the Caribbean and is likely to hit Florida on Saturday.
Being a Category 5 storm, hurricane Irma is one of the most powerful cyclones ever to make landfall. There is already a declared state of emergency in Florida, and around 6 million people are preparing for a mass evacuation.
It has been a happening summer in terms of political turmoil and escalating threats from North Korea. However, it will be likely remembered for the two large hurricanes at the end of the season.
Be sure to check out our previous week’s edition here, where markets were focused on the aftermath of hurricane Harvey.