April Update

The daily performance of stocks this month has been about as predictable as the South and West regions of the NCAA basketball tournament.

This month markets participants had to deal with rising interest rates, trade tariffs and a new $1.3 trillion-dollar government spending bill. I won’t go into details on each as they’re covered ad nauseum in other places.

Before going any further, I must point out, due to the polarization and thin skin of our nation at this time, that the following is a not an endorsement nor disapproval of President Trump. This is not a political newsletter. I don’t feel the need or “responsibility” to use a platform that others pay for to push my political views on others like so many celebrities do on their paid job – (unless it’s a political orientated show of course). That’s my short rant.

Trump considers himself a great deal maker and a master negotiator. At some point the U.S. had to deal with the continuance of China setting artificially low prices devoid of profits for steel in the U.S. market, a practice known as dumping steel. In 2016, pundits were calling the dumping tactic a trade war, but nothing was done. It was during that time that the EU imposed Tariff’s on Chinese steel to help combat the same problem.

While I’m not sure if this is the right way to go about it, I don’t believe that any choice of dealing with the issue would be easy. There are many ways that nations are trying to gain advantages (hacking of data, the theft of intellectual property, land) and they should not be taken likely as the long-term consequences are historical.

With the FED anticipating inflation rising closer to its 2% target and thus increasing the number of its rate hikes from 2 to 3, it will be interesting to see if the new tariffs heat up inflation, causing a chain reaction in rising rates. This will be an interesting negotiation / trade war to watch.