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Trump Doubles Tariffs
The Market Bull 2018

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The major averages struggle into the final hour with large losses. For the week the Standard and Poors 500 Index is down 8 points or .25%, while the NASDAQ has gained 26 points or .3%.

Trumps latest round of bellicose behavior sees a doubling of steel and aluminum tariffs for Turkey and threatening Russia with additional banking sanctions. That said given Turkey’s debt picture it faces a banking crisis as well. Banking crises have a nasty habit of becoming contagious even when the begin with banks nobody’s ever heard of in places few people have been, if history is any guide. This led to a route of emerging markets that spilled over into developed markets as the week comes to a volatile close. It would seem that the official US positions with respect to our allies, trading partners etc. is essentially “my way, right away, or the highway”. The problem with in your face strategies like this is that you risk blowback, sooner or later. The law of unintended consequences. But then tact and diplomacy were never Trumps strong suits.

The Consumer Price Index or CPI gained .2% in July on big jumps in Rents and Used Car prices. Energy fell .5% for the month. On a year ago basis the CPI is up 2.9% on double digit gains in energy costs.

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