Tag Archives: Trump-Navarro Trade War

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Cumberland Chair David Kotok (Podcast)

Author: , Post Date: February 1, 2019
Cumberland's David Kotok on Bloomberg Radio

Have you ever wanted to know more about the people who shape markets and business? P+L co-host Lisa Abramowicz sits down with Cumberland Advisors Co-Founder David Kotok to talk about his career path, stand out moments, and the advice he gives current students in business school. Running time 07:27 LISTEN HERE: Bloomberg Radio NOTE: Links […]

Shutdown. Markets. #2.

Author: David R. Kotok, Post Date: January 23, 2019
Cumberland Advisors Market Commentary by David Kotok

We thank many readers for their responses to my January 22 commentary, “Shutdown and Markets” (https://www.cumber.com/shutdown-and-markets/). Responses were varied, as expected. Some folks maintained their sense of humor. Others blamed one side or the other and criticized my final sentence, in which I suggested that both sides share a measure of the blame. So let […]

Shutdown and Markets

Author: David R. Kotok, Post Date: January 22, 2019
Cumberland Advisors Market Commentary by David Kotok

The stock market is ignoring the shutdown. The bond market is, too. So, too, are commodities, currencies, precious metals, fine art and other collectibles, sovereign debt, and many other asset classes. Those markets are moving for other reasons and not Federal shutdown. Why? Markets believe the shutdown is temporary. Market agents look at the childish […]

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.

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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 […]

Radio Podcast – The US-China Trade War: Global Markets in a Multi-Polar World | David Kotok

Author: , Post Date: December 1, 2018
David-Kotok-Radio-Money-Life-Blue

Kotok: the market is getting back to normal, & while it might be some new normal, it will have the traditional long-term returns of 8-10% for large-cap domestic stocks & lower single-digits for bonds, & he noted that correcting expectations should help investors find satisfaction in the market ahead.