Well, I have made it through the last week without giving up.
I feel the same way about this market.
We are close to record highs on the indexes and averages even after the first down week in a month.
Some are expressing concern over the recent news about new tariffs.
There was a thought of late that none of these tariffs would actually take place.
I would contend that the passage of the spending bill has allowed the Administration to refocus.
While, in general, I am against tariffs, I appreciate the need to make tariffs reciprocal.
This whole concept that the U.S. is the richest country in the world does not mean we shouldn’t participate on a level playing field.
This is the same argument that is posed about social programs.
The problem with the theory is that we are misnamed.
We have gotten to the point where we are finding it more difficult to pay.
The recent tariffs on Mexico and the EU are getting most of the at
tention.
Europe for ages has charged the U.S. with tariffs.
Canada and Mexico are a completely different animal.
First there is the U.S., Canada and Mexico Free Trade Agreement, which will actually limit much of the tariff impact.
No matter what, however, there should be equity. The actual impact is hard to gauge.
This concern is what sent the market spiraling down this spring.
Much is made of the downward pressure on earnings.
That is a justifiable concern.
The actual measure of the impact is very difficult to calculate.
The current administration finds little to worry about as one would expect. I find myself more on the side of a minor impact on earnings.
In Trump’s first four-year term, the tariffs were tagged with setting off a trade war, raising inflation and cutting earnings.
Little or none of that happened.
I am not saying it won’t this time, but I am not sure it will have a significant impact.
Earnings are the real measure of a market and it is what we have to focus our attention on to gauge where this market is headed.
The one caveat is that this market is driven by the Mag 7 and much of their product mix comes out of China.
We are certainly entering a phase of trade tension with China.
They hold most of the cards with semiconductor production almost exclusively done there and Taiwan.
Moreover, they control most of the strategic minerals necessary in production of all high tech items.
This is no easy competitor and they are in for the long haul.
If something happens to the Mag 7, the rest of the market will follow.
I am cautious but find it hard to be fearful.
It is easy to be positive at record highs.
The mood will be much different if we get a correction.
The spending bill will take time to have an impact as will the tariffs.
I like it when time is on my side.
Not saying to buy in at this point but selling out seems a bit much.
One area where I am starting to dip my toe in the water is crypto.
Wish I had been there years ago, but this whole stable coin is making some sense.
There are alternatives to Bitcoin that are worth your attention.
It will give you something to figure out these long wet days of summer.