Tariffs

[MightyGiants]

Rich: Two things about your reply:

(1) the words "stock market" are nowhere to be found (not a critique, merely and observation); and
(2) I agree about precious metals and cryptocurrency, but don't get the connection with tariffs.

Since you mentioned it, IMO it's ok for the U.S. to have a crypto reserve (or whatever they call it) but in case I'm not around when it happens, NEVER EVER EVER allow the gov't to build their own digital money. That would be a disaster waiting to happen.

Bob

The stock market is but one way to measure the economy (along with GDP and employment).  When the economy is thriving, business thrives and that pushed up the stock market.

[LennG]

 When you make your friends, your enemy, no matter how, that simply is not 'good for business'.

Our leader feels only he can place tariffs and the other party will suffer and bend, but the other party can retaliate and then it just becomes who can out last the other or who will blink first.

Just a ridiculous policy, especially to your neighbors and friends.

[MightyGiants]

When you make your friends, your enemy, no matter how, that simply is not 'good for business'.

Our leader feels only he can place tariffs and the other party will suffer and bend, but the other party can retaliate and then it just becomes who can out last the other or who will blink first.

Just a ridiculous policy, especially to your neighbors and friends.

Len,

I never believed that we would be at war with Canada.  I mean it's only a trade war, but still, it's not what I thought would happen to our neighbor and closest ally

[LennG]

Bob

Do you believe putting tariffs on anything coming out of Canada, because of some silly Fetenol excuse, is a good thing?

I can understand Mexico in that they want the Mexicans to get tough with immigration and all those drug cartels, but Canada?

[Bob In PA]

There will be no stability while Administrations change every four years and policies are light years apart. It's become evident to the rest of the world that there will be no long-term commitments with the United States while either party is unwilling to honor prior commitments. It's a tug of war that will have no winners. The irony is that we're a Nation primarily of moderates that move with which ever way the wind blows.

Ed: This is true unless a substantial number of executive orders are codified into law. Bob

[MightyGiants]

The stock market cratered yesterday.  It continues its downward plunge today

[MightyGiants]

I subscribe to Barron's (which is owned by the Wall Street Journal).  Here is today's report on why the markets are dropping:


Stocks Are Falling Again After Big Market Selloff
By

Connor Smith

The stock market was struggling to shake off its worst day of the year so far as Wall Street continued to worry about the economy.

The Dow Jones Industrial Average was down 150 points, or 0.4%. The S&P 500 was flat. The Nasdaq Composite was up 0.4% after marking its largest percent decline since Sept. 13, 2022.

"The market's main concern up until this point has been that the deteriorating levels of confidence on the part of consumers and businesses would translate into actual declines in activity," writes Bespoke Investment Group co-founder Paul Hickey. "That remains to be seen in actual data, but Delta (DAL) may be showing hints of that effect starting to happen as the company cut guidance last night noting 'the recent reduction in consumer and corporate confidence caused by increased macro uncertainty.'"

Even small businesses owners—a key constituency in President Donald Trump's base—are starting to express concerns. The NFIB small business optimism index, which spiked after the 2024 election, marked its biggest monthly decline since the Covid-19 pandemic in April 2020.

"Uncertainty is high and rising on Main Street, and for many reasons," said NFIB Chief Economist Bill Dunkelberg. "Those small business owners expecting better business conditions in the next six months dropped and the percent viewing the current period as a good time to expand fell, but remains well above where it was in the fall. Inflation remains a major problem, ranked second behind the top problem, labor quality."

Andrew Brenner, head of international fixed income at NatAlliance Securities, points out that S&P 500 futures overnight were down 10% from their high of 6178. The S&P 500 would need to close below 5529.74 to mark an official close in correction territory; the Nasdaq entered correction last week.

"The Mag 7 are the culprits, this is the problem of indexing, when it goes up it is great, when it reverses, it is painful," Brenner writes. "7 stocks were responsible for 54% drop of the S+P yesterday...meanwhile the losses on the Nasdaq totaled over [$]1.1 trillion , a truly ugly day."

[Bob In PA]

Bob

Do you believe putting tariffs on anything coming out of Canada, because of some silly Fetenol excuse, is a good thing?

I can understand Mexico in that they want the Mexicans to get tough with immigration and all those drug cartels, but Canada?

Lenn: My best guess - they want to treat both countries as similarly as possible, so ALL of the reasons applicable to one must at least appear to be being made applicable to both.

The Fentanyl thing is not "silly" (I know you well enough to realize you didn't mean the issue is silly, but it's a poor excuse for imposing a tariff - I probably disagree about that).

In any event, don't forget that Canada imposes tariffs on us. One that's particularly noteworthy is the tax on milk, which is killing the dairy business of mid-western states that border Canada. The dairy business is a very large part of the economy of those states (and Pennsylvania - not many people know that fact).

Bob

PS. Tariffs must be viewed in the context in which they being imposed, according to the administration, which is "making things fair." It's over my pay-grade to determine what's "fair" and the Canadians will soon have an election (this fall) that could change the entire landscape. The recent news of changing Prime Ministers only applies until that election, when the new Prime Minister's party will face opposition from Canada's conservative party. Right now, bottom line... too many variables (and too little knowledge on my part to try to answer your question with something other than the above cursory overview).

[MightyGiants]

The Fentanyl thing is not "silly" (I know you well enough to realize you didn't mean the issue is silly, but it's a poor excuse for imposing a tariff - I probably disagree about that).

It is silly when you consider that roughly 90% of the fentanyl smuggled into the country is done so by American citizens.

[Bob In PA]

I subscribe to Barron's (which is owned by the Wall Street Journal).  Here is today's report on why the markets are dropping:

Stocks Are Falling Again After Big Market Selloff
By

Connor Smith

Rich: I really appreciate your posting that. With due respect to Connor Smith, who knows a heck of a lot more than I do about markets, his attempt to sum things up as he did (the final paragraph), while true regarding yesterday, is far too simple to explain what right now is a very complex stock market. Bob

[Bob In PA]

It is silly when you consider that roughly 90% of the fentanyl smuggled into the country is done so by American citizens.

Rich: That's why the emphasis so far (regarding fentanyl) has been on both the border/immigration aspect and the public safety angle (arresting/prosecuting criminals, no matter where they were born). Bob

[MightyGiants]

Rich: That's why the emphasis so far (regarding fentanyl) has been on both the border/immigration aspect and the public safety angle (arresting/prosecuting criminals, no matter where they were born). Bob

Yet, hitting Canada with tariffs because they are not doing enough to stop American citizens from smuggling illegal drugs into America is the epitome of silly.

[Bob In PA]

The stock market is but one way to measure the economy (along with GDP and employment).  When the economy is thriving, business thrives and that pushed up the stock market.

Rich: I may remind your of that "As Time Goes By". lol

[Bob In PA]

Len,

I never believed that we would be at war with Canada.  I mean it's only a trade war, but still, it's not what I thought would happen to our neighbor and closest ally

Rich: You guys... short memories... think back to events that preceded signing the USMCA. Bob

[MightyGiants]

Rich: You guys... short memories... think back to events that preceded signing the USMCA. Bob

Only one trade war, I could find

https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_trade_relations