Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today
Discussion: Impact of China Tariffs
Premium: Goldman’s Desk Assess China Tariff impact
Discussion: Impact of China Tariffs
Q: What Parts of the US Economy Are Most Sensitive to Tariffs on China?
Goldman expects a second Trump administration to raise average tariff rates on imports from China by about 20 percentage points. Non-consumer goods would likely see bigger hikes than consumer goods.
Stuff we buy…
The US relies heavily on China for certain consumer items:
Appliances ( 10 and 24%)
Footwear and clothing (10-30%)
Consumer electronics, especially telephones (39%)
In their baseline scenario, fully passing these tariffs through to prices could lift consumer costs for Chinese-origin goods by 2-10%
Q: What about Stuff we sell?
Higher Input Costs
Reciprocal Tariffs
Export Restrictions on Critical Raw Materials
Full Analysis and graphics at bottom…
Q: What risks does it mean for the economy and the Fed’s role?
Recession, Stagflation, Inflation and Fed reactions
Covid Aftermath 2.0.
They always choose inflation
Continues in premium discussion…
News/Analysis: Unlocked Favorites
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Equity Recap:
US equities were flat after a holiday-shortened week. Large caps lagged small caps: S&P 500 (-0.04%) vs. Russell 2000 (+0.90%). MSCI Emerging Markets (EEM) lost 0.35 and MSCI EAFE (EFA) added 0.47%.
Market News:
"Finding an affordable car in the U.S. has already become a challenge for many budget-constrained Americans. New import tariffs on Mexican-built vehicles threaten to make the problem worse. Today, nearly one-third of all vehicles priced below $30,000 and sold in the U.S. are built in Mexico, including the Nissan Sentra, Ford Maverick and other popular nameplates, according to an analysis by car-shopping website Edmunds. A decade ago, Mexico was responsible for one-fifth of the affordable cars sold in the U.S., the firm’s data shows." Source: WSJ
"Recurring applications for US unemployment benefits rose to the highest in more than three years, adding to signs that it is taking longer for out-of-work people to find a job. Bloomberg
"India has eclipsed China as Asia’s top market for company listings this year, as buoyant stock prices spark a boom in initial public offerings. Propelled by companies including Swiggy and Hyundai Motor, India will be the world’s second-largest equity fundraising market behind the US for the first time, Source: FT
"Vacancies at open-air shopping centres in the US have dropped to historically low levels, defying forecasts of a retail apocalypse caused by the rise of ecommerce. FT
"Demand for artificial intelligence-enabled smartphones could help to protect parts of the semiconductor industry from a “vicious” downturn if investment in data centres slows, said the chief executive of the world’s largest provider of chip testing machines. FT
"Retail traders sent almost $30 billion into Nvidia shares this year on balance, according to Vanda Research. CNBC
Ht Datatrek and Newssquawk
Data on Deck:
MONDAY, DEC. 23 Consumer confidence
TUESDAY, DEC. 24 Durable-goods orders
WEDNESDAY, DEC. 25 Christmas holiday
THURSDAY, DEC. 26 Initial jobless claims
FRIDAY, DEC. 27 Advanced U.S. trade balance in goods1
Final Market Check
