We finally got some good news out of the trade war talks last week as the United States, Mexico and Canada came to an agreement on removing steel and aluminum tariffs. It was good to see something positive after last week’s talk about the Chinese trade war. It was named The United States-Mexico-Canada Agreement (USMCA) which is a different name than the former NAFTA but overall, we are happy to see that deal completed.
In last week’s vlog, #372 Trade Storms, we talked about looking in our own backyard for direction. Everything lately has been focused around the global economy as a whole, including the U.S. trade deal with China. The U.S. consumer sentiment report came out last Friday and showed the highest level it’s has been in over 14 years, 15 years to be exact. So, instead of looking at the overall global economy and getting worked up about the noise, it’s time to start putting the focus back on our own economy. A lot of people that watch the news globally would be concerned about the U.S. consumer based on what has been reported, but it’s becoming clear that the U.S. consumer, which is the average person, really doesn’t care about what’s going on everywhere else.
The Australian Stock Market
We rarely, if ever, talk about the Australian Stock Market. However, there are some important points to talk about surrounding it. A piece of interesting information was released over the weekend saying that Australia’s conservative party had a surprising victory in a recent election. What makes that interesting for us is that Australia has the longest unbroken expansion going 27 years strong without a recession. Looking at that, we think that maybe we could learn something from Australia’s political environment and maybe even a little from their Federal Reserve. We’re not saying we’re experts or that Australia is going to impact the global economy in any way, but in our opinion, it’s something to watch. There were some surprising upsets in their political environment and afterward their market shot up to an 11-year high. On top of that they’ve been a straight 27 years without a recession. Most of the U.S. population seem to think that a recession must happen eventually. Australia is proving that that assumption isn’t true and that a recession is not something that absolutely has to occur. It’s not an economic law. A recession is typically caused by mistakes and maybe we should look to see what mistakes they’re not making. It’s definitely a piece of information worth analyzing.
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