Thoughts
Trump’s ongoing tariff threats are a short term bearish factor for the stock market.
Confirmation: Trump’s tax cut is a big medium term bullish factor for the U.S. stock market.
The Citigroup Economic Surprise Index is coming down. A medium term bullish sign for stocks
The global economy is still improving. Medium-long term bullish for stocks around the world.
The stock market will not be hurt by double-digit inflation in the next few years.
3 am: Trump’s ongoing tariff threats are a short term bearish factor for the stock market.
The U.S. is considering broad curbs on Chinese imports according to Bloomberg. The key takeaways are:
The U.S. Trade Representative’s office will recommend various actions to counter China’s theft of U.S. intellectual property. This includes broad curbs on Chinese imports and limits on Chinese investment in the U.S. This announcement is not immediate. It will come out next month.
China has been very quiet amidst Trump’s recent tariff threats. China is more cautious because China stands to lose more than the U.S. from a trade war.
There has yet to be any concrete action despite all the counter-threats from Canada and the EU. In other words, these countries don’t want an across-the-board trade war.
Vice Foreign Minister Zhang Yesui said this week that China will host talks on trade issues with U.S. officials. In other words, China might bow to U.S. threats to avoid a more costly trade war.
There has been a lot of talk but little action. Focus on action. The ongoing tariff talk is a short-term bearish factor for the U.S. stock market. But it is not a medium-long term bearish factor. A major trade war requires Congressional approval. Congress supports small-scale tariffs like those on steel but is generally pro-free trade.
3 am. Confirmation: Trump’s tax cut is a big medium term bullish factor for the U.S. stock market.
