Macro Trends/Forecasts

Jeff Miller

"The Man Who Called Dow 20,000" --CNBC

Tariff News - Market Analysis on May 5th, 2019

President Trump tweeted plans to proceed with the increase of tariffs on Chinese imports from 10% to 25% -- supposedly on Friday.  China may cancel the talks scheduled for this week.  We will see a gap lower opening, probably of 1.5 - 2.0%.

There has been disagreement about how much the market was anticipating a successful deal.  Many observers, looking at the 2019 rally, thought it was completely baked in.  I disagreed.  I see the rally as just relieving the bogus recession concerns from last December.

The market decline seems about right as a knee-jerk reaction.  Since I still expect an eventual deal, and since I am an investor, I will do some buying tomorrow.  An eventual deal should be worth 8% or so in the broad averages and much more if you own the right stocks.

Why do I expect a deal? My reason is little mentioned.  The tariffs have already created significant damage to American businesses.  Most people do not understand that, apparently including the President's economic team. Here is an analysis from a surprising source: https://www.washingtonexaminer.com/opinion/trumps-tariffs-cost-businesses-2-7-billion-in-just-one-month.  The President will get the message as the Koch brothers, whose enterprises cover the whole economy, weigh in.

Jeff Miller provides Economic Analysis as well as Market Forecasts as one of the original contributing analysts at FATRADER. A quantitative modeling expert and former university professor who is the #1 Economics contributor at Seeking Alpha, Jeff is regarded as an expert on economics, market reaction to news events, and computer-based trading.
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