S&P Intrinsic Value Index

S&P Intrinsic Value Index Update

“Davidson” submits:

Q1 hedge fund letters, conference, scoops etc

The Dallas Fed reported the at 12mo Trimmed Mean PCE 2.03%, SP500 a 21% premium to Value Investor Index. Thus far, tariffs the US has imposed on opposing countries to negotiate lower global tariffs has had so little impact on US prices that it is a very hard call to identify any impact. The question then is “Why no impact in the US?”

S&P Intrinsic Value Index

S&P Intrinsic Value Index

The answer must include actions by foreign entities to keep prices in the US competitive. This means they must be absorbing US tariff increases to keep their citizens working so not to sow social discord at home. Recent reports indicates that this is at least partially the case. The full answer will require more time to bring out the details and the US may yet see higher inflation. Nonetheless, it is interesting that inflation remains stable in the US after 1yr of tariff increases when all had feared systematic price increases. Does this mean countries which export to the US are desperate to maintain their export markets because they do not the political strength at home?

Too early to do anything but make a speculation about inflation. That nothing of importance has shown up at this point is intriguing. Should the US appear relatively unhurt by the current administration’s tariff initiatives, are lower global tariffs not far ahead as desired?

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