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Registered Investment Adviser Caleb Lawrence

 Despite the expected tit for tat relative to Trumps trade war the major averages shrugged off their early losses to enter the final hour with small gains.

Factory orders fell for the first time in 6-months with a 1.4% decline in January on a large drop in durable goods orders. The proxy for business spending non-defense capital goods ex-aircraft fell for a 2nd month down .3%.

Trumps opening trade war moves have generated the expected reciprocal response after the European Union announced its own set of tariffs running some 25%. From a historical perspective currency wars lead to trade wars which in turn lead to shooting wars. It should be remembered that the republicans brought us the Smoot-Hawley tariff act following the Great Depression. A bill widely credited with exacerbating and extending the depression and contributing to a 25% drop in global trade. I’m sure the World Trade Organization will get involved soon enough as the tit for tat self-defeating game of tariffs and counter tariffs escalates.

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