Good morning. It is day one under a new administration and U.S. markets – up for the moment – are taking it all in stride. But … to steal from an old Wall Street saying … if we have a rising tide, it might not lift all boats … as some of the executive orders (of which there are many) are expected to influence quite a few. Tariffs are the talk of the morning as CNBC claims investors are a bit relieved these are not taking immediate effect … but that doesn’t mean trading partners are comfortable by any means. This resulted in me going online to figure out possible effects and I was surprised to learn the top country to which we export is Canada (followed by Mexico and China). But I also had my eyes open concerning imports … as I always thought China was number one … by far … but in 2023, Mexico took over the top spot (with China next and then Canada). So yes … while tariffs on imports might sell well to many listeners … results of such a move … especially in the face of possible retaliatory tariffs … will take some time to see if they are as beneficial as many assume. Banc of America Global Fund Survey has an interesting result … as it shows the biggest perceived “tail risk” is not a trade war … nor is it an AI bubble … but the biggest market-moving concern is inflation resulting in the Fed actually increasing rates. Yikes … not a pleasant thought to have at a time when the U.S. economy seems to be chugging along quite nicely. I won’t get too much into the U.S. pulling out of the Paris Agreement (again) as I do have an admitted bias and try hard (unsuccessfully) to be opinion-neutral. I read both sides of the climate change discussion (I won’t call it an argument) and just pray we are not making a mistake … as recovery gets harder with each passing missed hurdle. That’ll wrap it up for me today. I bet against the Eagles … and the Chiefs … and also placed a bet against Ohio State … so I have to get to work to make up for my losses. Meanwhile, I look forward to next week’s games and just learned of an important announcement that should help my strategy. The Buffalo Bills were just called for a Roughing the Passer penalty ahead of next week’s game in Kansas City. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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