MMA Weekly Column: December 9, 2019

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The jobs market turned in a stellar performance in November, with nonfarm payrolls surging by 266,000 and the unemployment rate falling to 3.5%, according to Labor Department numbers released Friday. Those totals easily beat the Wall Street consensus. Economists surveyed by Dow Jones had been looking for solid job growth of 187,000 and saw the unemployment rate holding steady from October’s 3.6%. Average hourly earnings rose by 3.1% from a year ago. “Bottom line, America is working,” Larry Kudlow, director of the National Economic Council, told CNBC’s “Squawk on the Street.” “These are very strong numbers.” – Jeff Cox, “Jobs Growth Soars in November,” www.cnbc.com, December 6, 2019.

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MMA Weekly Column: December 2, 2019

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China threatened to retaliate after President Donald Trump signed two bills into law in support of Hong Kong protesters. “China firmly opposes Hong Kong Act. We have made stern representations & strong protests to U.S.,” Geng Shuang, a spokesman for the Chinese Foreign Ministry, said in a briefing Friday. “It is a stark hegemonic practice & a severe interference in Hong Kong affairs, which are China’s internal affairs. China will take strong counter-measures.” Investors fear the signing of these measures could complicate negotiations as a key Dec. 15 deadline approaches. If a deal is not reached by then, an additional round of U.S. tariffs on Chinese products would take effect. – Fred Imbert, “China Threatens to Take ‘Strong Counter-Measures’ Against U.S. After Hong Kong Bill Signings,” www.cnbc.com, November 29, 2019.

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MMA Weekly Column: November 25, 2019

Note: The U.S. will celebrate its Thanksgiving holiday on Thursday, November 28. U.S. Markets will be closed that day.

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The trade war initiated by President Donald Trump isn’t helping, Yellen said. For the past year and a half, the U.S. and China have been lobbing tariffs back and forth on billions in goods as part of the White House’s efforts to level the global playing field and halt the theft of technology and intellectual property. “I see no sign that that’s been successful in turning around these trends,” she said of the protectionist trade actions. “These tariffs are taxes on American consumers and businesses. It’s making it more difficult and more expensive to do business, to control costs, and consumers are seeing higher prices from it.” – Jeff Cox, “Janet Yellen Says ‘There is Good Reason to Worry’ About the US Economy Sliding into a Recession,” https://www.cnbc.com, November 21, 2019.

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MMA Weekly Column: November 18, 2019

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The Wall Street Journal first reported the roadblock in the trade talks, adding China is hesitant to commit to a specific amount of agricultural products in the context of a potential deal. China has agreed to buy up to $50 billion in U.S. farm goods as part of the so-called phase one trade deal, President Donald Trump claimed last month. Stocks rapidly pared gains following the news. – Yun Li, “US-China Trade Talks are Getting Held Up Because of Disagreements on a Number of Issues,” https://www.cnbc.com, November 13, 2019.

The Dow Jones Industrial Average rallied to record levels on Friday, reaching 28,000 for the first time ever, after White House economic advisor Larry Kudlow said China and the U.S. were getting close to reaching a trade deal. – Fred Imbert, “Dow Jumps More than 200 Points to 28,000, Posts 4-Week Winning Streak,” https://www.cnbc.com, November 15, 2019.

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MMA Weekly Column: November 11, 2019

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Beijing’s statement Thursday that the U.S. and China have agreed to roll back tariffs as part of a “phase one” trade accord lifted financial markets, but questions remained over how much ground – if any – the Trump administration has agreed to give. – Josh Zumbrun, William Mauldin, and Chao Deng, “Chinese Say Deal is Set, but Hurdles Remain,” Wall Street Journal, November 8, 2019.

President Donald Trump said Friday he has not agreed to scrap tariffs on Chinese goods, dampening hopes about a coming resolution to a jarring trade conflict. “They’d like to have a rollback,” he told reporters. “China would like to get somewhat of a rollback, not a complete rollback because they know I won’t do it.” Stocks fell to their session lows following Trump’s comments. – Jacob Pramuk, “Trump Says He Has Not Agreed to Roll Back Tariffs on China, After a Week of Trade Optimism.”

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MMA Weekly Column: November 4, 2019

Due to travel today to New Orleans, there will be no Free Weekly Column. Instead, we are going to reprint a full chapter from the Forecast 2019 Book, a timely piece since I am now in the middle of writing the Forecast 2020 Book. This chapter was written in November 2018, about one year ago. See below for the chapter, where I have added in my current thoughts in red, which show how my forecasts have unfolded for the President. If you wish to view and download a PDF of the chapter, with additional highlights and graphics, please click HERE. This chapter will give you an idea of what to expect in next year’s book, coming out on December 16, 2019. It’s going to be quite a year for the United States and President Trump and Forecast 2020 will give you a glimpse of what to anticipate in the 2020 Presidential Election. The book will also cover financial markets, favorable and challenging times in 2020, and forecasts for the year for each sign. Enjoy this chapter from Forecast 2019 along with my commentary!

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MMA Weekly Column: October 28, 2019

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The U.S. Treasury on Friday said that the federal deficit for fiscal 2019 was $984 billion, a 26% increase
from 2018 but still short of the $1 trillion mark previously forecast by the administration. The gap between
revenues and spending was the widest it’s been in seven years as expenditures on defense, Medicare and
interest payments on the national debt ballooned the shortfall… Annual deficits have nearly doubled under
President Donald Trump’s tenure notwithstanding an unemployment rate at multidecade lows and better
earnings figures. Deficits usually shrink during times of economic growth as higher incomes and Wall
Street profits buoy Treasury coffers, while automatic spending on items like food stamps decline – Thomas
Franck, “Federal Deficit Increase 26% to $984 Billion for Fiscal 2019, Highest in 7 Years,” https://www.cnbc.com, October 25, 2019.

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MMA Weekly Column: October 21, 2019

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Larry Kudlow, the chief economic adviser to President Trump, accused staff members of the Federal Reserve’s Board of being part of the “deep state.” – Megan Henney, “Larry Kudlow Accuses Feb Board of Being ‘Deep State,’” https://foxbusiness.com, October 17, 2019.

Republican Senate Majority Leader Mitch McConnell on Friday blasted President Donald Trump’s decision to withdraw U.S. troops from northern Syria, calling the move “a grave strategic mistake” in an op-ed for Washington Post. “The recently announced pullout risks repeating the Obama administration’s reckless withdrawal from Iraq, which facilitated the rise of the Islamic State in the first place,” McConnell wrote in the op-ed. While his piece does not explicitly lay blame at Trump’s feet — or even mention his name — it warns that the Trump administration’s sudden foreign policy shift “will leave the American people and homeland less safe, embolden our enemies, and weaken important alliances.”– Kevin Breuninger, “Mitch McConnell Blasts Trump’s Syria Withdrawal as a ‘Strategic Nightmare.’” https://www.cnbc.com, October 18, 2019.

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MMA Weekly Column: October 14, 2019

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Stocks slid off their best levels of the session on Friday after the U.S. and China agreed to a “phase one deal” in the trade war, but still managed to post strong gains. The deal, which will take three to five weeks to write, includes China agreeing to raise its agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services. The U.S. will not be raising tariffs from 25 percent to 30 percent on Oct. 15. A decision has not yet been made on the tariff increase scheduled for Dec. 15. China’s trade team is calling the agreement a “pause” in the trade war, and not a deal. The Dow Jones Industrial Average was up as much as 517 points in the moments following the announcement before finishing higher by 319 points, or 1.2 percent.– Jonathan Garber, “US and China Agree to ‘Phase One Deal’ in Trade War, Stocks Rally,” https://www.foxbusiness.com, October 11, 2019.

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MMA Weekly Column: October 7, 2019

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The U.S. economy added 136,000 jobs in September, the Bureau of Labor Statistics said Friday. Economists polled by Dow Jones expected an increase of 145,000 jobs. The unemployment rate fell to 3.5%, a 50-year low, but wages grew at a slower-than-expected pace last month. “This sounds like a Goldilocks number to me,” Steve Grasso, director of institutional sales at Stuart Frankel, told CNBC. “It still gives the Fed some room for cover to cut rates. This is as close to a not-too-hot, not-too-cold greeting for the market.” – Fred Imbert, “Dow Jumps More Than 200 Points After Steady Jobs Report,” October 4, 2019, https://www.cnbc.com.

And on that news, plus supportive statements by Fed Chair Jerome Powell that the economy was still on sound footing, the U.S. stock market blasted off to the upside.

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