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Tag Archives: Tariffs

10/1/20: U.S. Tariffs on European Wines: Inflicting Self-Harm

Next week, the  Office of the US Trade Representative is expected to make a determination on the potential imposition of an up to 100% tariff on imports of wine from Europe. Which is a bad thing for the overall state of the global trade, bad news for the European producers of wine, bad news for the American consumers and their European counterparts, and bad news for the U.S. wine industry. But 'bad things' do not stop there. There will be costs imposed on restaurants and bars. There will...

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Can Six Myths Keep The Market Going?

Piper Jaffray forecasts by year end 2020, the S&P 500 (SPX) will hit 3600, a 12.8 % increase. Of eighteen analysts interviewed by Marketwatch only three forecasters expect a decline for the SPX. Will the SPX reach 3600?  The SPX has soared over 400 % from a low of 666 in 2009 to over 3200 at the close of 2019. Mapping the SPX ten year history onto a psychology market cycle map of growth and decline phases poses interesting questions. As the market has zoomed over 400% upwards over ten...

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What We Are Not Being Told About The Trade Deal

Unlike most trade deals where the terms are readily available, the details of the Phase One trade agreement between China and the U.S. will not be announced nor signed in public. Accordingly, investors are left to cobble together official comments, anonymous statements from officials, and rumors to ascertain how it might affect their portfolios. Based on official and unofficial sources, existing tariffs will remain in place, new tariff hikes will be delayed, and China will purchase...

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“The Art Of The Deal” & How To Lose A “Trade War.”

This past Monday, on the #RealInvestmentShow, I discussed that it was exceedingly likely that Trump would delay, or remove, the tariffs which were slated to go into effect this Sunday, On Thursday, that is exactly what happened. Not only did the tariffs get delayed, but on Friday, it was reported that China and the U.S. reached “Phase One” of the trade deal, which included “some” tariff relief and agricultural purchases. To wit: “The U.S. plans to scrap tariffs on Chinese goods in phases, a...

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An Eventful Week Ahead

The US employment report on the first Friday of December usually marks the unofficial end of the year.  The desks are often lighter and dealers are loath to jeopardize the year’s bonuses in thin and often erratic markets.  This year is an exception.  Next week features the first ECB meeting with Lagarde at the helm and the final FOMC meeting of the year.  The UK and China have their monthly data dumps—a concentration of high-frequency data.  The US reports both CPI and retail sales. ...

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Is Inflation Really Under Control

Recently, analysts have been discussing the pros and cons of using negative interest rates to keep the U.S. economy growing.  Despite this, Fed Chairman Jerome Powell has said that he does not anticipate the Federal Reserve will implement a policy of negative interest rates as it may be detrimental to the economy.  One argument against negative interest rates is that they would squeeze bank margins and create more financial uncertainty. However, upon examining the actual rate of inflation we...

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Tariffs and tribulations: recasting US metals industries

“Trade wars are good, and easy to win,” President Donald Trump tweeted in March 2018 after imposing sweeping tariffs on US imports of steel and aluminum. The application of a little-known trade remedy sent shockwaves across the metal markets and upended well-established supply chains. More than two years have passed since the Section 232 investigation was carried out by the US Department of Commerce, under provisions in a 1962 trade act, and 20 months since the tariffs were imposed on the...

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US Brandishes Tariff Weapon and Weakens Animal Spirits

Overview: Asia Pacific equities mostly declined in sympathy with yesterday's large sell-off in the US and Europe. China and Taiwan were the notable exceptions, while Australia's 2.2% decline, following the central bank meeting that resulted in what many are seeing as a hawkish hold, led the move lower. Europe's Dow Jones Stoxx 600 fell 1.6% yesterday, the largest loss in two months, and is extending the losses for a third session today. US shares are trading with a lower and a gap...

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Five global trends for the ferrous and steel sectors

S&P Global Platts hosted its Ferrous & Steel Outlook event in Singapore last week. Here are five key takeaways from the event. 1. China winter steel production cuts of less concern than property sector   Chinese mills have been less inclined to restock iron ore for fear they will be ordered to cut crude steel or sintering production over winter to reduce emissions, which would curb demand for iron ore and pull down prices. S&P Global Platts China steel analyst Jing Zhang...

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Technically Speaking: It’s Crazy, But We’re Adding Equity Risk

In last week’s update, I discussed the case of why it was “now or never” for the bulls to take control of the market. To wit: The ECB announced more QE The Fed reduced capital requirements and initiated QE The Fed is cutting rates A “Brexit Deal” has been reached. Trump, as expected, caved into China Economic data is improving Stock buybacks If you are a bull, what is there not to love?  Despite a long laundry list of concerns, as stated, we remain equity biased in our portfolio models...

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