Trade Balance and market Update

More positive then Negative Comments regarding U.S. China trade talks today,Nothing new just rehashing same story line. But hey until markets stop responding why stop mentioning it, Spoos + 7 handles cash Indices,SPX,NDX another new all time what is different today is that Russell finally touched a new year to date High so even Small caps enjoying ” the tide lifts all Boats” Market

Today’s Economic data housing starts Much better then expected Biggest 2 month increase in 12 years(BBg) Richmond Fed and consumer Confidence missed and lastly Goods trade balance better the expected per Bloomberg near 1.5 year highs. Recall that Trump and and most high level Advisers view winning the trade war by Shrinking the Deficit. Today report showed Imports lowest in roughly 2 years and Exports not as bad as forecast = smaller deficit. I looked at quarterly chart of this metric and i was interesting

Lets see,remember this is goods only deficit doesn’t include services.All three of the last recession showed an decrease in the Deficit,a move higher in this graph,but trend for years has been down or a bigger deficit.I for one believe that the U.S. needs to continue to run a deficit with rest of World to facilitate global trade not out of control deficit but not one close to zero either.

Commentary from Trading Economics:

The US goods trade deficit narrowed sharply to USD 66.5 billion in October 2019 from USD 70.5 billion in the previous month and below market expectations of USD 71.3 billion, the advance estimate showed. That was the smallest goods gap since September 2017 as imports fell 2.4 percent due to a sharp decline in purchases of vehicles (-5.9 percent), consumer goods (-4.8 percent), foods, feeds & beverages (-2.9 percent), and industrial supplies (-1.9 percent). Increases were seen in imports of capital (0.5 percent) and other goods (3.5 percent). Meanwhile, exports dropped at a softer 0.7 percent led by lower sales of consumer goods (-4.0 percent), foods, feeds & beverages (-3.0 percent), vehicles (-2.4 percent), and capital goods (-0.8 percent). On the other hand, exports rose for industrial supplies (1.0 percent) and other goods (4.7 percent). Goods Trade Balance in the United States averaged -20736.32 USD Million from 1955 until 2019, reaching an all time high of 1492.20 USD Million in June of 1975 and a record low of -79790 USD Million in December of 2018.

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