Reuters this morning speaks to the point I made in yesterday's log entry, as well as to the roiling markets have taken due to the trade war. None of this should be of any surprise to anyone who remotely understands modern-day economies and markets.
"Feb 7 (Reuters) - U.S. stock futures fell on Thursday as worries of slowing global growth resurfaced after the European Union cut its economic growth forecasts, while investors waited for the next breakthrough in U.S.-China trade negotiations.
The European Commission said euro zone growth will slow to 1.3 percent this year from 1.9 percent in 2018 because of an expected slowdown in the largest countries of the bloc, partly due to global trade tensions.
Global markets have been roiled by a trade war between the world's two largest economies since early 2018, but optimism that a potential trade deal could be reached before a March 2 deadline, when additional tariffs go into effect, has helped recent gains in the markets."Oh, and by the way, if you think yesterday's news about the lower than expected U.S. trade deficit is a good thing, think again.
Here's Bespoke Investment Group on the topic:
"Economists expected little change, but the trade deficit declined by $6.2bn, driven almost entirely by slower nominal imports of goods; they were down $7.7bn or 3.5%, the most since March of ‘16.
To be clear, falling gross trade is not constructive; narrowing of the trade deficit mechanically boosts GDP but if it’s because imports are slowing, that expenditure “gain” is likely to be offset somewhere else (for instance, inventories).
We also note the services trade surplus has started to slow from record levels, another negative."