Beat The Tariff 📦

Beat The Tariff

We don’t want shop shelves chock-full of too many products. Equally, we don’t want them bare. The US Commerce Department just announced that shelves are stacked slightly higher, 0.5%, than in April. The meaning of this?

Be it cars, clothing, candles, or carrots, American companies are still ordering big. Many of these items need to be shipped in from China, which is knee deep in trade tensions. That’s why the management teams behind our stocks are ‘adding to basket’ now, ordering the inventory they expect to need so they can get one step ahead of Trump before he hammers down more tariffs, increasing border costs.

Expectations for the future are everything because when we buy a stock, we’re buying the future. Current trade tensions would be an ample excuse for businesses not to invest in growth, hurting our expectations for the future. However, new data shows that it would take longer for inventories to run dry this quarter than last quarter. That sounds like a good omen from US businesses and a sigh of relief from the market.

Stocked up corporate shopping trollies bode well for faith in American demand, too. Plus, fears of a slowdown in the stock market are easing further with statistics revealing increases in sales (0.6%) and the productivity of our factories (0.4%). Andrew Hunter of Capital Economics believes this is precisely the data needed for Federal Reserve “officials to likely wait until the September meeting before pulling the trigger” on interest rate cuts. The Fed meets tomorrow, so stand by!

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