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Is the Market Saying Globalism is Beating Trumpism?
Apple CEO Tim Cook spoke in China over the weekend, where the company is opening a new research center. And he took on the notion of globalism and said it is something that should not be rejected.
Mr. Cook acknowledged gains aren’t evenly distributed within certain nations; however, he proclaimed globalization “in general is great for the world.”
He further stated…I think the worst thing would be to—because it didn’t help everyone—is to say it’s bad and do less of that. The reality is you can see that countries in the world…that isolate themselves, it’s not good for their people.
On another note; yesterday, the world’s richest man and globalist Bill Gates met with President Trump. While details have yet to be released, a spokesperson for the Gates Foundation emailed that the conversation focused on developing initiatives in global health development and domestic education.
In addition, Apple shares (APPL) hit an all-time high yesterday; there were additional market signals that Globalism is winning.
Caterpillar Climbs Out of the Hole
Q. When is bad news good news?
A. When the bad news has been the best news for a long time.
Caterpillar’s (CAT) worldwide retails sales were down just one percent in February, the best monthly performance since December 2012. This makes three consecutive monthly improvements, suggesting an inflection point occurring between November and December. The strength is concentrated in the Asia-Pacific Region where construction was up 52%. Resource businesses in Europe, Africa, and the Middle East (EAME) were also up 16%.
This is a company that has been lauded by the Trump administration with the President himself visiting a Caterpillar retailer; and yet, the Justice Department raided an office in its pursuit of taxes apparently associated with overseas operations.
Ironically, the company found itself in the crosshairs of President Obama, to the point of a couple of public dust-ups, forcing management to show hiring and firing distinctions among the domestic and international workforces.
We continue to believe the stock is extremely undervalued and once it clears, the cloud of tax-rigging allegations could spurt above $100 quickly.
This year, the stock market has been all about globalism as the NASDAQ has come on like gangbusters, up 9.6% while the American-centric Russell 2000 has struggled and is up less than 2%.
Overall, the broad market has stalled. The question is “What is the message of the market?” The answer is digesting gains for the moment. As for isolationism, it’s always been a bad thing, eventually making great empires such as China and Japan vulnerable as the world passed them by during their slumber. Yes, we need better deals, and we need to open foreign markets even more.
I think we’ll have them, but free trade simply means an exchange of goods and services at an agreed price.
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