Deficit Direction May Improve

The U.S. may have the world's largest absolute trade deficit, but the deficit has been deeper. At the end of the country's fiscal 2016, the U.S. trade deficit was $585 billion, which equaled 3.1% of 2016 GDP. Over the past 25 years, the average U.S. trade balance was a $411 billion deficit, or 2.9% of GDP. When things were going well, the U.S. surplus reached a 25-year high in 2000 at $236 billion or 2.3% of GDP, but then the deficit reached a 25-year low in 2009 at $1.4 trillion, or 9.8% of GDP. The policies of the Trump administration will no doubt have an impact on the trajectory of the deficit. But other factors, somewhat out of Washington's control, also play a role. For example, the increasing...  energy independence of the U.S. can reduce imports of crude oil. Also, the U.S. economy is becoming increasingly service-based, and these industries are less export-oriented and are offsetting trade deficits and contributing to overall U.S. GDP growth. As we've noted, there seems to be a very low correlation between trade deficits and near-term economic growth. But it is a hot-button issue that affects numerous industries, posing risks but also creating opportunities.    more

Argus President John Eade discusses the potential impacts of the Trump Tariffs

Investors put rally on pause

Stocks are lower at mid-morning Friday. A return of some geopolitical concerns that had ebbed earlier in the week, combined with soft earnings from Nvidia (NVDA) and Applied Materials (AMAT) seems to have caused traders to hit pause on yesterday's rally. ...  more