Continuing the tariff conversation (from an investment view)...
Because of the tariff measures, US imports plunged 16.3% in April, a record drop, while exports picked up 3.0%.
Net Exports (how much the U.S. sends out minus how much the U.S. brings in) was the biggest drag on GDP growth in Q1, the primary contributor to a negative print last quarter.
The narrowing of the trade deficit should flip that drag into a major positive contribution to GDP growth in Q2.
GDP growth is good for the economy. (When GDP grows, it typically indicates increased output, more jobs, and potentially higher incomes for individuals.)
Now, market data is often highly volatile and subject to short-term noise – seasonal quirks, one-off events, or data revisions – that can muddle the underlying trend where the true information resides.
The same is true with stock prices.
That’s why the best investors focus on trends, more specifically changes in the trend, and implement moving averages to paint clearer pictures.
I remain a buy and hold investor in the US. I continue to believe in US exceptionalism. While I have a small portion of funds in other world markets, like Warren Buffet, I remain virtually entirely invested in US public companies.
Edit addition, FYI:
In the United States, the vast majority of companies are private rather than public.
Private Companies: There are over 25 million private companies in the U.S. These include businesses of all sizes, from small businesses with few or no employees to very large companies that are privately held. (For you mystery shoppers, the Wawa Convenience Store chain is an example of a private company.)
Public Companies: The number of public companies in the U.S. is significantly smaller, with less than 4,000 listed on stock exchanges. This number has actually decreased substantially over the past couple of decades. (For you mystery shoppers, the Home Depot home improvement store chain is an example of a public company.)
Edited 1 time(s). Last edit at 06/06/2025 11:25AM by maverick1.