In The Lonely Bull

Everyone living in the shadow of an active volcano understands one cannot know when the next eruption is coming; some big, some small.  Investors in the shadow of a trade war have similar feelings.  Like those living with imminent danger, traders have learned how to adapt.  Every burp does not require a major adjustment.  Markets just had a burp in the form of the announced possibility that the trade war drags on and the U.S. may not even seek resolution until after the next Presidential election.

What is always difficult to know with all of these rumblings, is which ones are significant.  In negotiations, there is always a lot of posturing; feints, and parries.  What is clear is that the trade war is important to investors.  Resolution would be a relief and add to optimism about greater economic growth.  The stock market would celebrate with higher prices.

In the meantime, business is adapting.  Supply chains are being reworked.  Other foreign markets are being pursued.  The economies of the U.S. and China are slowly being disentangled.  This is not only good for us; it is good for the rest of the world as business opportunity expands.

Make no mistake, there will be more eruptions, but their impact is likely to be less and less.

Stay steady, my friends.

The Lonely Bull

Recommended Posts