The US has a trade surplus in the services sector with the EU When Trump is talking about the US trade deficit with the EU, for example, he is only talking about the goods/manufacturing sector. He conveniently forgets to mention that goods are only half of the story. The other half is the services sector, represented primarily by US companies like Microsoft, Google, Amazon, etc.
In addition, let's not forget that every time a European tourist stays at a U.S. hotel, for example, the money spent is counted in the services export basket. And every time someone in Canada or Japan or Mexico pays to listen to music or watch movies and television shows made in the United States, they are adding to America’s surplus in the services trade.
Many of the countries that the United States is targeting for tariffs run a services deficit with the United States, including Canada, China, Japan, Mexico and much of Europe, according to the U.S. Census Bureau.
That the US has a trade surplus in the services sector is frequently overlooked in this discussion. Trump's fixation on manufacturing as the only source of good jobs is a generation or two out of date. Ergo, trade surpluses in the services sector also matter. The US, unlike Germany, for example, is not a manufacturing economy anymore, but a service economy.
FYI, here is another perspective based on an excerpt from the European Union Commission's report on EU-US trade in goods and services:
"Millions of jobs in the United States are related to EU-US trade and investment. The European Union is a reliable source of critical supplies to the United States, including medicinal ingredients and pharmaceutical products, advanced machinery and equipment, and aerospace parts and components. At the same time, the European Union is the largest buyer of the United States’ natural gas and oil, which is an important element for ensuring transatlantic energy security and to allow a shared strong response to Russia’s military aggression against Ukraine.
- EU-US goods and services trade is balanced: the difference between EU exports to the US and US exports to the EU stood at €48 billion in 2023; the equivalent of just 3% of the total trade between the EU and the US.
- The total bilateral trade in goods reached €851 billion in 2023. The EU exported €503 billion of goods to the US market, while importing €347 billion; this resulted in a goods trade surplus of €157 billion for the EU.
- Total bilateral trade in services between the EU and the US was worth €746 billion in 2023. The EU exported €319 billion of services to the US, while importing €427 billion from the US; this resulted in a services trade deficit of €109 billion for the EU.
- The EU and the US are also major investment partners. EU and US firms have €5.3 trillion worth of investment in each other’s markets (2022 data).
- US exports of goods and services to the EU support 2.3 million jobs in the US, and EU firms’ investments in the US employ 3.4 million people."
Hence when Trump said on Sunday that "They don’t take our cars. They don’t take our food products. They don’t take anything. And we take their cars: Mercedes, Volkswagen, BMW. You know, we take their millions of cars. They take no cars. They don’t take our farm product. They don’t take anything." None of this is correct.
I am not against maintaining and supporting a strong manufacturing sector in the US, but a more balanced perspective regarding our trade "deficit" with the EU by including the vital services sector in our discussion would be very helpful, in my opinion.
Newer CEFs with Limited Terms Newer CEFs with Limited Terms
As the bond CEFs have sold off, it’s time to review the newer CEFs with limited terms and compare them with their unlimited term cousins. At their term ends, their discounts would vanish, providing a small boost to the TR, a fact that most CEF investors overlook. Many also avoid them simply because they are newer, but they have more established cousins with the same managers.
Firm: Limited Term CEF | Unlimited Term CEF or OEF Cousins
Pimco:
PDO (discount -2.60%),
PAXS (-3.62%) | PDI, OEF PONAX / PIMIX
Nuveen:
NDMO (-7.8
1%) | NVG, NZF, OEF NMBAX / NUVBX
NMCO (-7.45%) | NMZ, OEF NHMAX / NHMRX
Thornburg:
TBLD (-7.96%) | TIBAX / TIBIX
https://ybbpersonalfinance.proboards.com/post/436/threadhttps://ybbpersonalfinance.proboards.com/thread/515/cefs-newer-term-structures-nuveen
U.S. Treasury issues retribution??? What if there is a new tool being considered by foreign holders The yield increases from late last night have settled down a bit to about one half from the high point. At least a little relief.
Equity, bonds and US$ down, simultaneous. OUCH !!!
And China announced a 'screw you, too' policy of a 84% tariff increase, early today.Current/active UST
yields chart that updates daily during open hours.
One doesn't find much stand up opposition in congress or the senate to the current 'crazy'. So, economic damages will be done; that will be difficult to fix short term, IMO.
Global bond rout starting to sound market alarm bells
2.5 hours ago
06:21 EDT REUTERSU.S. Treasuries, the bedrock of the global financial system, were hit by fresh selling pressure on Wednesday in a sign that investors were dumping their safest assets as turmoil unleashed by U.S. tariffs prompts forced selling and a dash for cash.
The
10-year Treasury yield has risen 36 basis points (bps) to 4.35% this week alone as prices fall sharply. If sustained, that would mark the
biggest weekly jump since 2013.
The rout in the roughly
$29 trillion Treasury market dragged borrowing costs across the globe higher, raising pressure on central banks and policymakers to act fast to shelter economies now facing a sharp slowdown as U.S. tariffs kick in.
Japan will cooperate with the Group of Seven advanced economies and the International Monetary Fund to help stabilize a market rout unleashed by U.S. tariffs, the country's top currency diplomat said on Wednesday.
Japanese 30-year government bond yield surged to 2
1-year highs and Britain's 30-year bond yields rose to their highest since
1998.
The
10-year U.S. Treasury yield, the globe's benchmark safe-haven anchor, was unmoored and long bonds were the focus of intense selling from hedge funds which had borrowed to bet on usually small gaps between cash and futures prices.
Current Market Activity: ad infinitum Market is starting to ignore US-China tariff war - how bad could it get now? Futures are showing that SP500 is near where it ended at the close on Tuesday.
Unusual VIX > VXN
Death-Crosses I think minor inconsistencies in FD1000's posts were probably just innocent errors.
After all, why would a rational person seek to impress a bunch of strangers on the internet?
Attempts to do so would be utterly absurd!
Why would you think this time is different than others times where I posted that I sold before major meltdowns.
I explained many times too that it's part of my system. I sell first, ask questions later. I'm wrong plenty, and when I am, I'm out for just several days until risk reversed. When I'm right, I stay longer from weeks(20
18,2020) to months as I did in 2022.
So Much for Flight to Safety There is a good reason why I'm in MM.
When risk is very high, emotions are out of control. No way to predict the future. I sell first quickly and ask questions later.
MOVE (bond volatility) greater than 110 is a good indication.
BTW, the pros are not better than main street. Many times they increase the fire and panic as well.
I can come up with 2 explanations: the inflation is not as low as the Fed like and jobs creation isn't low for the Fed to do anything, AKA, cutting rates.
This is why rates are tracing back some of what they lost.
So Much for Flight to Safety From WSJ brief this morning ...
Intensifying Selloff in U.S. Treasurys Stirs Fears
An aggressive selloff in longer-term U.S. Treasurys overnight sent a worrying sign to markets that almost no asset is safe as President Trump’s sweeping new tariffs go into effect.
The yield on the benchmark 10-year U.S. Treasury note spiked as high as was 4.51%, according to Tradeweb. That was up from around 4.26% in afternoon U.S. trading Tuesday and less than 4% at the end of last week. The yield on the 30-year bond hit nearly 5%.
Yields on both bonds edged off their highs by 5:30 a.m. ET, but remained higher than Tuesday. The dollar also weakened against other major currencies.
Yields, which fall when bond prices rise, initially plunged after Trump announced his new tariffs on April 2, reflecting a flight to safer assets as investors sold riskier assets like stocks.
Longer-term yields, however, reversed course on Monday and took another leg up Tuesday after a $58 billion auction of 3-year notes met with tepid demand from investors.
“Given this big shock, with the tariffs and everything, people are just nervous,” said Thanos Bardas, global co-head of investment-grade fixed income at Neuberger Berman.
For bond investors, the sharp rise in yields is uncomfortably similar to a brief selloff that occurred at the depth of the Covid meltdown, when traders sold whatever they could to raise cash.
In this case, analysts and investors say there is broad nervousness about holding longer-term Treasurys ahead of government auctions of 10-year notes on Wednesday and 30-year bonds on Thursday.
One concern of U.S. investors is that overseas private investors or foreign central banks could sell Treasurys in reaction to Trump’s tariffs.
Investors are also worried that tariffs will drive up consumer prices even as they slow U.S. growth.
That has increased the appeal of owning short-term bonds, which could benefit if the Federal Reserve cuts interest rates, relative to longer-term Treasurys, which are especially vulnerable to inflation.
Once yields started rising this week, the move was accelerated by selling from hedge funds forced to close out various trades that benefited from falling yields, analysts said.
Current Market Activity: ad infinitum Optimistically, at some point the tariff war will end…either via Congressional action or otherwise.
So….it makes sense to compile a buy-list. It’s funny, over the last year or so I established via Schwab a number of alerts for positions I would really like at prices I’d like to pay.
6 alerts have triggered this week. Now…not to buy RIGHT NOW, but when cooler heads prevail.
Anyone doing the same?
Long before the current mayhem, I'd been researching all sorts of funds and stocks. I landed upon only TWO:
BLX and
ET. By now, ET has fallen from the heights by quite a bit, making it attractive for me to buy more, under $
15.00. As for BLX... Would you believe ? It was UP today, but still down generally along with the Markets. When the first BLX dividend landed in my account since buying, I discovered zero taken preemptively from the published total in foreign tax. That's one reason why it's a keeper.
I'm not a trader. I intend for these to be long-holds. Unless the sky falls down. The major Indices are in Bear Territory. My portfolio is less than half that far down. Still stings.
