Tag Archives: tariffs

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Trade Wars and Government Shutdowns Can Be Fishy Business

Author: Michael McNiven, Ph.D., Post Date: January 7, 2019
Market-Commentary-Cumberland-Advisors-Trade

We have written with some regularity about the consequences of trade wars. The Apple story and the potentially larger economic slowdown in China are a case in point. There are consequences to all of this for all parties involved. In general, we do support free trade in the ideal world where there are no barriers […]

Cumberland Advisors Market Commentary by David Kotok

Stock Market and Tariff Truce

We constantly get email defending the Trump-Navarro Trade War policy. The critics outnumber the defenders, but we can observe that both sides of this debate are digging in their heels.

Market-Commentary-Cumberland-Advisors-Trade

We also get counterarguments that ask why we should permit China to steal our intellectual property. Simple answer is, we shouldn’t let any country or business or individual steal. Theft deserves punishment.

Our point is the Trump Trade War took the issue of tariffs and made it less targeted and more macro. In doing so POTUS introduced confusing elements. Example: What do soybeans have in common with algorithms? Or why put a tariff on a washing machine and invite a counter-tariff on an exported Maine lobster?

We also note that there is a time lag as tariff rhetoric segues to tariff threat to tariff notice period to actual imposition to resulting price changes. The full period of this process is about a year. So higher prices for US consumers today had their genesis almost a year ago.

Here is an example from Bloomberg that applies to consumers: “$1 Billion a Month: The Cost of Trump’s Tariffs on Technology” (https://www.bloomberg.com/news/articles/2018-12-14/-1-billion-a-month-the-cost-of-trump-s-tariffs-on-technology). Readers may note the timing depicted in the chart. And perhaps reader critics will appreciate how tariffs levied on China are really a sales and use tax on Americans.

China is realizing that their retaliation with tariffs is having an internal negative effect. Chinese policy is now changing because growth is slowing in China and credit-cycle pressure is rising.

Will Trump-Navarro Trade War team members realize that the US is also experiencing pressure and alter policy to take advantage of the present opportunity for negotiation? We shall soon know.

I really don’t care whether Trump declares himself brilliant and victorious in his Trade War. I really don’t care about the inner workings of Xi and his government. But their respective political self interests could make for a trade truce deal, and I do care about that.

I care about resumption of growth and global exchanges that create more investment and opportunities for entrepreneurs, as well as lower risk of war. It takes statesmen to lead and reach agreement. We will soon know if we have them in Beijing and Washington.

Meanwhile, markets wait, investors wait, business waits, employees wait, credit market agents wait. All have their patience tested in China and in the US and in the rest of world, as tariff-induced inflation pressures and growth-impairment pressures continue to build.

We expect a truce deal. If we’re wrong, the performance of our equity portfolios will suffer. If we’re right, the performance of our equity portfolios will perform well, with good reasons for doing so. The arguable trading range on this outcome is 2400 low on S&P 500 on bad outcomes and 3300–3400 on good outcomes. We think the odds favor the upside, with a time horizon of 12–18 months. We see $172–175 in 2019 earnings for the S&P. We see $180–182 for 2020. Those figures assume that a truce or at least some improvement in the US-China Trade War is coming.

Recession 2019? Chances of Economic Decline in Next 12 Months Now Highest of Trump Presidency, Experts’ Survey Finds

Author: , Post Date: December 18, 2018
Cumberland-Advisors-David-Kotok-In-The-News

Excerpt from Recession 2019? Chances of Economic Decline in Next 12 Months Now Highest of Trump Presidency, Experts’ Survey Finds By Nicole Goodkind On 12/18/2018 at 2:38 PM Excerpt below: Respondents mostly believed that the next recession would be triggered by a combination of rate hikes by the Federal Reserve, increased tariffs due to Trump’s […]

Trump Trade War Tariffs & Markets

Author: David R. Kotok, Post Date: December 6, 2018
Trump Trade War Tariffs & Markets

“We’ll not mince words here: The president’s characterization of himself as “Tariff Man” is juvenile and unpresidential. We cannot imagine Mr. Eisenhower, Mr. Kennedy, Mr. Johnson, Mr. Nixon, Mr. Ford, Mr. Carter, Mr. Reagan, Mr. Bush, Mr. Clinton, Mr. Bush or Mr. Obama ever… EVER… making a juvenile statement such as this to any other […]

Whack a Mole

Author: Robert Eisenbeis, Ph.D., Post Date: July 25, 2018
Cumberland Advisors Market Commentary by Robert Eisenbeis, Ph.D.

In the latest on US trade policy, we are now starting to see the economic consequences of starting a tariff war. Farmers have been complaining that they are being hurt irreparably by the imposition of tariffs in retaliation for the tariffs being imposed on China and our allies. The Trump administration is now proposing to […]

Fed Independence

Author: Robert Eisenbeis, Ph.D., Post Date: July 23, 2018
Cumberland Advisors Market Commentary by Robert Eisenbeis, Ph.D.

In the wake of the turmoil in Washington, DC, over his performance in Helsinki, President Trump also took a sideswipe at the Federal Reserve, criticizing the FOMC’s recent efforts to normalize policy.

Most presidents – though not all – have understood that Fed independence ensures separation from the Treasury and serves as a check on fiscal excesses. When a central bank takes orders from the fiscal side of government, history shows that inflation and economic decline soon follow.

Dollar May Have Not Peaked Yet, Cumberland Advisors CIO Says

Author: , Post Date: June 24, 2018
Bloomberg - David Kotok - Dollar May Have Not Peaked Yet

Dollar May Have Not Peaked Yet, Cumberland Advisors CIO Says Bloomberg Daybreak: Australia June 24th, 2018, 7:25 PM EDT  David Kotok, chairman and chief investment officer at Cumberland Advisors Inc., shares his views on emerging markets, the trade disputes and the dollar. He speaks with Haidi Lun and Yvonne Man on “Bloomberg Daybreak: Australia.” (Source: […]

Suncoast FYI talks with Michael McNiven & James Curran about Financial Literacy Day

Author: , Post Date: April 4, 2018

Dr. Michael D. McNiven,  Managing Director and Portfolio Manager at Cumberland Advisors, joins Dr. James Curran, Dean of College of Business at USF Sarasota-Manatee, to discuss their upcoming event, Financial Literacy Day. Attendees of Financial Literacy Day: An Update on the Financial Markets & Economy can receive continuing ed credit from the following orgs: • AFCPE […]