Banging the head 3

US Trade Deficit was higher than expected in December. Oil or non-oil, it does not matter:

U.S. ran a record trade deficit with China for 2014 as a whole ($343 billion, up nearly 8 percent from the previous record in 2013) and a record deficit in manufactured goods with the world as a whole ($734 billion, up 13 percent from the 2013 record).  [Link]

The answer for this was not exactly the strong dollar or weak overseas growth that does not attract American exports. What does America make cheaply and/or competitively now? Another data point released on the same day had the answer: Nonfarm productivity declined, in contrast to expectations for a small rise, in the fourth quarter.

What did US stocks do? They rallied more than a per cent.


2 thoughts on “Banging the head 3

  1. By one estimate more than a quarter of US company profits come from abroad hence broader trade deficits, which can weaken the dollar (no chance of this, I know, considering the current state of the world) would be a positive for the stock index. Anyways, I know you don’t mean to ascribe meaning to daily S&P 500 changes or anything, just saying don’t bang your head too much on such items, or you’ll break it:)


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