President Trump announced what he calls reciprocal tariffs yesterday, but reciprocal means the same doesn't it? Simple Definitions: reciprocal: done, given, or felt equally by both sides. reciprocal affection: related to each other in such a way that one completes the other or is the equal of the other. Full List of Countries Hit With Reciprocal Tariffs: You will note that the tariffs announced were at a 10% floor to meet most countries at Reciprocal as defined. The co… View More
We wanted to share an update on what’s happening right now in the markets. Yesterday, at the market’s close, President Trump announced his broad-sweeping tariff plans. The market’s initial reaction is negative, contributing to today’s market drop. The first thought we want to share is that it is not atypical nor unexpected for the markets to react negatively to “change,” especially when the change is of this magnitude. President Trump’s end goal is to rewrite the book on how the … View More
During the ten years prior to COVID, PCE inflation, the Fed’s preferred measure, averaged about 1.5% per year. Jerome Powell said it was too low and he wanted inflation to “average” 2% over time. Well, he got his wish, and more. PCE inflation has averaged 3.7% in the past five years and 2.6% over the past ten years. In other words, because of its misguided policies during COVID, the Fed has pushed inflation above both its short-term and long-term target. Any apparent success at bringing i… View More
The volatile risk-off backdrop has continued. Economic concerns have surged with the U.S.-led trade war moving into high gear. The current turbulence may yet provide a good buying opportunity in risk asset markets but probably from lower than current levels. Whether equity markets rebound or continue sinking hinges on the outcome of the trade war and whether the endpoint is: a) meaningful protectionism that soon undermines the global economic expansion, or perhaps continued high uncertainty that… View More
It is true that tariffs are a tax. It is also true that tariff policies have been volatile…on and off again…different carve outs…different countries…phone calls that change things. All this clearly has an impact on the market. So, we are not surprised to see stock market volatility. However, it isn’t all about tariffs. Many major models of overall stock market valuation show that the market is expensive. The so-called Buffet Indicator, which measures the market cap of the S&P 500 … View More