The G20 Summit in Berlin drew a lot of attention this past week. There was a disappointment that they could not reach a fair trade agreement. Much of that had to do with the Trump affect on protectionism and keeping America first. We believe that going forward there will be a bilateral agreement between the US and each trade country.
The markets are watching
The G20 Summit also failed to reach an agreement on climate change funding but it wasn’t all for nothing. They made a lot of headwind on currency manipulation. The point is that the markets are watching to see what kind of economic impact this all has on corporate earnings.
Protectionism in action
Perhaps one of the best test cases for protectionism came when England went through Brexit. Prime Minister, Teresa May, recently announced that Great Britain will begin the two year process of their exit from the European Union on March 29th. This will show us how the unwinding of those trade deals work and maybe start a bilateral trade deal with the US. This will be protectionism in action.
Department of Justice vs. Consumer Finance Protection Bureau
In a previous blog we discussed regulations and the Consumer Finance Protection Bureau here in our own country. Last Friday the Trump administration and the Department of Justice sued the bureau in Federal court basically saying the establishment of the agency is unconstitutional. If you are trying to reduce regulations you can either repeal the law, defund them or sue them out of existence. We are seeing more and more of the later.
Positive for financials
Among the regulatory environment events and other issues we are watching, interest rates have gone up, which is a positive for financials. The market now has to digest all of this, including President Trump’s policy and protectionism. We are watching to see the impact on corporate earnings and economic growth.
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Greg Powell, CIMA
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Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
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