The Trump Effect: US Trade Deficit Falls on Record Exports, Market Soars

The Trump Effect: US Trade Deficit Falls on Record Exports, Market Soars

The Trump Effect: US Trade Deficit Falls on Record Exports, Market Soars

$DIA, $SPY, $QQQ, $RUTX, $VXX

The US trade deficit fell to a 7-month low in April as exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans.

The US Commerce Department said on Wednesday the trade gap dropped 2.1% to $46.2-B, the smallest since September.

Data for March was revised to show the trade deficit falling to $47.2-B, instead of the previously reported $49.0-B.

Economists polled by Reuters forecasted the trade deficit unchanged at $49-B in April.

If the trend in the real trade deficit is maintained, trade could contribute to GDP (gross domestic product) in Q-2 after having a Neutral impact in Q-1 of Y 2018.

Strong data ranging from manufacturing to consumer spending and the labor market have led the Federal Reserve Bank of Atlanta to estimate that economic growth in the Q-2 will Top a 4.8% annualized rate.

The US economy grew at a 2.2% pace in Q-2.

Economists say that tariffs will do little to shrink the trade deficit, partly because of the dollar’s status as the global reserve currency and the low US savings rate, including a fiscal deficit that has been blown up by a $1.5-T tax cut package.

Economists are often wrong.

10 of 11 S&P 500 sectors advanced Wednesday.

The financial space (+1.8%) was strong throughout the session.

The NAS Comp and Russell 2000 posted record highs again.

Wednesday, the major US stock market indexes came in at: DJIA +346.41 at 25146.39, NAS Comp +51.38 at 7689.24, S&P 500+23.55 at 2772.35 

Volume: Trade on the NYSE came in at 958-M/shares exchanged

  • NAS Comp +11.4% YTD
  • Russell 2000 +9.2% YTD
  • S&P 500 +3.7% YTD
  • DJIA +1.7% YTD

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
6 Jun 2018 QQQ 175.07 Bullish (0.38) 153.45  None
6 Jun 2018 DIA 251.46 Bullish (0.36) 250.41 254.10
6 Jun 2018 SPY 277.23 Bullish (0.32) 274.10 278.11

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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