Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

Karen Carpenter used to sing about rainy days and Mondays getting her down. Well, if she were alive today, on a rainy and cold Monday here in the northeast, she might add tariffs to her list.

The U.S. … claiming that unfair practices from China with regard to trade must end … fired a volley by raising tariffs on Chinese imports … warning China not to retaliate. And how did the Chinese react? By retaliating, of course … and, according to The Guardian, installing a 25% duty was on 2,500 American products … and a 20% duty on another 1,000. The next move is ours, it seems … and investors appear worried, as the Dow is already down around 600 points as we await the next “tweet” out of Washington.

One of the (unfortunate) results of the tariff … appears to have been cleared up over the weekend. Initially, the President seemed to claim tariffs were a payment from the Chinese, going directly to the U.S. Treasury … but Economic Advisor, Larry Kudlow, cleared that up (a bit) by stating yesterday that it is actually the U.S. that pays … but “both sides will suffer on this” … and the U.S. economy is able to withstand a bigger hit than the China’s.

But right now it appears he is correct … as each side appears bruised … and investors fear additional punches will be thrown. Regardless, many strategists have stated that it is not only China and the U.S. that will feel the effects … as global markets are also affected by the battle. And investors? Right now they appear to be feeling the effects also … and even though the Dow is presently down, as mentioned, the tech-heavy, import-heavy, Nasdaq doing much worse on a percentage basis).

That’s enough for me this morning. Maybe you can sense my concern, though I do have hope that both sides will lick their wounds and realize an agreement is in both of their best interests.

Meanwhile, I just learned Doris Day passed away.

Que sera, sera.

Have a great day,

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905

… as of 11:40 AM today …

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