Good morning. Around this time every year we have market mavens quick to point out that September has, historically, been the worst month for stocks. Not only has there been a negative result in 6 of the last 10 years, but Yardeni Research points out that from 1928 through 2023, monthly returns in September have been around -1.17% … far worse than any other month. But it might not be the calendar driving stocks down today … but news surrounding the tariffs … as the U.S. judicial system got involved and said many of the tariffs were a big “no-no” … a phrase attributed to an economist named “Nanette” back in the 1920s. The U.S. Court of Appeals struck down a slew of the announced tariffs … and even this move is resulting in quite a bit of confusion as it won’t take place for a while, and the question comes up about tariffs that were already assessed. While nimble accountants might be painfully capable of figuring out how to rebate companies that were charged a fee (if an assessment was indeed deemed “illegal”) … what about a consumer who might have paid more if some of the increase was already “passed down?” Meanwhile, the administration is counting on the Supreme Court to weigh in … and decide to reinstate the tariffs as … according to people in charge … consequences would be dire indeed if the justices do not see things their way. We have the President himself warning that if these are, indeed, found to be illegal, we are on our way to becoming “… a Third World Nation” … and Treasury Secretary Bessent claims a repeal of the tariffs would be a “dangerous diplomatic embarrassment” … which is interesting rationale as to why something should be accepted. But the quote of the day might go to White House trade adviser, Peter Navarro, who went so far as to giving the view that if the Supreme Court does not strike down this ruling, it would mean, “the end of the United States.” Of course, not everyone sees the country and the stock market jointly to be on the verge of collapse. Morgan Stanley’s Chief U.S. Market Strategist, Michael Wilson, told Bloomberg “the U.S. stock rally has further to run” … just weeks after claiming we are in a new bull market. Additionally, Evercore ISI strategists feel a substantial market increase could be in store due to the “technological revolution” supported by “AI.” We shall see. On a final note, I just read that the CEO of chocolate company Nestle has just been fired due to a relationship with an employee. While Kit Kats are one thing, a Nestles officer should know better than to even try to give away a few of those Hershey’s Kisses. Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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