Trump’s Trade War Continues
Growing up in the suburbs back in my day meant seeing tons of kids out and about playing.
I had more friends in my neighborhood than I could count. And unlike today’s millennial dough balls and screen junkies, we actually got exercise by playing outside a lot.
One of my favorite games back then was “kick the can.” You may remember this one. It combined the best parts of capture the flag and hide and seek and brought hours of joy to us kids.
Today there’s a new form of kick the can being played… but it’s not the version we knew and loved growing up…
It’s Kick the Can Down the Road: Trade War Edition
Over the weekend, markets were trending downward. Come Monday, the losses were getting acute. Tuesday’s trading offered no respite. Renewed fears of tariffs and an even more prolonged trade war had heightened again.
The bad headlines began before we broke for Thanksgiving.
As the nation was getting ready to turn focus to football and turkey, word broke that phase 1 of Trump’s trade deal would not likely be completed until the beginning of the new year.
The real bombshell, however, came Tuesday. Trump doubled down on his tough talk, saying in all likelihood a deal would not be struck until after the 2020 election.
Markets reacted sharply of course, trending further into the red after the news broke. As it stands, there once again appears to be no end in sight for Trump’s trade war.
Talk about kicking the can down the road!
In Fact, Trump’s Upping the Ante
The tweet storm came fast and furious Monday. Trump accused Brazil and Argentina of devaluing their currencies and called for renewed steel and aluminum tariffs against the two nations.
Then he lashed out at France, threatening $2.4 billion in duties on French goods in response to a new digital services tax enacted by the French.
He also took some time Monday to lash out at the Fed, too. It was a busy day for Trump’s thumbs…
So what can you do to grow and protect your wealth while navigating this muck of negative news?
Resident trading expert Greg Guenthner weighs in on the current market conditions:
“For whatever reason, the market was buying into the idea that Trump wanted to make a deal sooner rather than later. Despite the endless trade war rhetoric that’s held the financial press hostage for almost two years, investors were holding out hope for an easy resolution before Christmas.
“But as we’ve mentioned many times before, there doesn’t appear to be any end in sight to these trade war shenanigans. We’ve now entered the phase of the cycle where the trade war ‘matters’ to the markets and all eyes are on the administration to contain the damage.”
With that in mind, it pays to hedge the prospects of a seasonal Santa Claus rally with some defensive positions as well.
Tech stocks look quite sensitive to trade war news right now, but high-quality defensive plays that pay strong dividends are great ways to grow and protect your wealth if markets sour.
And don’t forget about gold and gold-related assets.
Those assets could benefit greatly if on top of his trade war Trump gets his way on a weaker U.S. dollar. More on this as things develop.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch