Tuesday, October 23, 2018: Caterpillar Tumbles on Effects of Trade Tariffs!

The Stock Market and Trade Tariffs

DOW -377.17—-NASDAQ -139.48—-SP500 -41.13—-NYSE -167.70

Portfolio Leaders: T
Portfolio Laggards: CAT, BPT, SHOP

The stock market is set to REALLY plummet today. Down at least 400 points based on the DOW Futures.

Is this a sign of a strong economy?


Trump inherited a strong economy from Obama, as his 8 years in office coincided with the recovery and rebound from the Great Recession. So, I suppose it’s expected that there would be recovery growth after 2008 under the Obama years.

According to the top economists, the stock market is the leading indicator of economic strength in the country, because when you think about it, job generation and low unemployment is not really a true indicator of a strong economy. Think about that a minute. Just because there are a gazillion jobs out there and low unemployment, it doesn’t necessarily mean that the country is doing well.

What makes the country do well economically?

I’m no economist, but it’s a no-brainer that a strong economy is based on strong profits, which translates to companies and their employees making more money!

But, with the imposition of 25% trade tariffs on several countries like China, Canada, Mexico, the UK and the European Union, it affects the bottom line of every American company doing business with every other country out there.

Already, strong companies like Caterpillar will see a huge drop in stock price this morning, as the reality of 25% trade tariffs are finally kicking in and affecting the company’s bottom line… profits.

Add to this an incredible amount of deficit spending and tax cuts to the ultra-rich—the middle class and poor have yet to see any real tax cuts that were promised—and it would appear that we see a recipe for disaster on the horizon. And as a concerned citizen and investor, I am truly concerned for the future under this administration.

At least Obama released his tax returns to the public, and I have studied them, and Obama has an incredible portfolio of stocks and bonds. With Trump, we have nothing, and no proof that he is a legitimate businessman—which was one of his selling points—in fact, hiding his tax returns is proof that he MUST be hiding something illegal or tied to the Russians. I mean, the man filed for bankruptcy 4 times! Compared to other rich people like Warren Buffett who have never gone bankrupt.

The only thing certain here is that the current administration has created a scenario of fear, uncertainty and retaliation as other countries imposed with 25% trade tariffs are imposing trade tariffs back at us. And today the Trade Wars will greatly affect the big companies like Caterpillar.

Once again, this will affect the bottom line of profitability which is the true indicator of wealth in America. And will affect all of us when the price of everything from gasoline to steel products go up.

The current administration has only created a ‘sugar high’, but once the high is gone, and reality sets in, we could have a serious problem on our hands, just as every Republican President has created in the history of our nation in the last 100+ years… either an economic recession or a depression.

Just my .02 cents.

Please vote for change!!!

Portfolio Leaders

AT&T (T)
finviz dynamic chart for  T

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Carlos Rull

Carlos Rull is a musician living in the San Diego area. His interests include Yoga, Eastern Philosophy, Zen Buddhism, and Gardening. He plays drums, piano, and composes New Age & Ambient music, and his albums are available on iTunes and Amazon.com.

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