June 11, 2018

Weekly Market Commentary
June 11, 2018

The Markets

Never before could the Group of 7 Summit have been mistaken for reality TV until now!

The generally dignified annual meeting of leaders from the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom (along with the heads of the European Commission and European Council) was a lot more contentious than usual.

Disagreements about trade were the reason for heightened tensions among world leaders. At the end of May, the United States extended tariffs on aluminum and steel imports to U.S. allies. They had previously been exempted. These countries “account for nearly two-thirds of the [United States’] $3.9 trillion annual merchandise trade,” reported The Washington Post.

Retaliation to U.S. sanctions was fast and furious. Mexico implemented a 20 percent tariff on U.S. pork legs and shoulders, apples, and potatoes and 20 to 25 percent duties on types of cheeses and bourbon.

Canada imposed $16.6 billion in tariffs on U.S exports of steel and aluminum in various forms, but also orange juice, maple syrup, whiskey, toilet paper, and a wide variety of other products.

The European Union has a 10-page list of goods targeted for sanctions, including bourbon and motorcycles, reported The Washington Post. Complaints that U.S. tariffs are illegal also are being filed with the World Trade Organization.

Canadian, Mexican, and U.S. stock markets remained unfazed to this turmoil and major indices in each country moved higher last week. Some American indices even reached new highs. European markets fared less well. Markets may be bouncier this week as investors digest the costs and benefits of trade sanctions. What I have observed is that on some earlier tariff announcements is after all the bluster calms down some of these countries have redone their trade agreements quietly in the background.

THE STRUGGLE IS REAL. Millennials are known – and often disparaged – for being innovators and disrupters. According to Business Insider, the generation has been credited with ‘killing’ everything from starter homes to napkins. There’s a reason for that. Millennials are the biggest generation and have become the world’s most powerful consumer group.

Millennials have different buying habits and preferences than previous generations. They opt for access rather than ownership, reports Goldman Sachs, which has helped fuel the growth of the gig economy’s sharing services.

As the first digital natives, Millennials also tend to favor brands that offer the greatest convenience at the lowest price. Many of the most successful brands have strong social media presence.

Focus On The Positive

“Don’t ever let failure defeat you. Failure plays a big part in the process of achievement. Use failure to get tougher. Use failure to get smarter. Let it inspire and motivate you. When you do this and persevere, you will build wealth and success.” –excerpt from The 12 Factors of Business Success, Mollie Marti