Weekly Roundup 2019 CW 09

Everything to keep Mr. Market happy! We got to know in the beginning of the week that President Trump planned to delay an increase in tariffs on Chinese goods set to take effect at the end of this week.

We do not know in what direction these negotiations will play out. And one of the reasons is because both Xi Jinping and President Trump are negotiating in a way that’s very typical for businesses, not very ideal for governments.

President Donald Trump asked China in a tweet Friday to lift all of its tariffs on American agricultural products, pointing to his decision to delay a second round of tariffs and to improving trade relations with China.

China is the United States’ second largest agricultural market, according to data from the Office of the US Trade Representative. US agricultural exports to China hit $20 billion in 2017, with soybeans, the largest single export, accounting for $12 billion.

This roundup is my last update before my vacation. Next update will be on the 31 March. I will enjoy Malaysia and Singapore, both urban visits and the sun is on the agenda.

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US Market Outlook

SPX 1Y compared to GOLD (US$ / OZ)

Markets had a volatile week as investors attempted to balance the ongoing US/China trade negotiations with a meeting between President Trump and North Korean leader Kim Jung Un. The meeting was cut short.

We had Congressional testimonies from Trade Representative Robert Lighthizer, Fed Chair Jerome Powell and former Trump lawyer, Michael Cohen. Despite the market moving headlines, the S&P 500 managed to close roughly flat on the week thanks to a bump on Friday that came as a result of several strong earnings releases on Thursday evening.

Treasury yields were relatively pushed higher, to roughly 2.75% as U.S. GDP for the fourth-quarter of 2018 came in better than expected. In line with the treasury move, gold prices pulled back a bit but held above $1,300 per ounce. The dollar weakened slightly versus the euro while oil ended the week higher, as OPEC+ showed no intention of giving in to Present Trump’s demands for an increase in production to reduce prices.

Perhaps the most significant macroeconomic announcement came on Sunday. President Trump provided an update on trade via a serious of tweets, indicating that, “substantial progress” has been on a trade deal with China, and officially announced a delay of the date of when U.S. tariffs would increase. They were previously set to rise to 25% on March 2nd. Everything to keep Mr. Market happy!

On Tuesday, the U.S. Census Bureau reported that housing starts fell 11.2% month over month in December. With December’s reading, which was the worst monthly reading since September 2016, housing starts were down 10.9% from December 2017.

All in, the housing market remains a spot of weakness. We should continue to monitor this indicator closely as annual housing starts are one of many good indicators hinting at where we are in the economic cycle. The thinking is that given the prolonged lead times in building new developments, builders won’t continually start new projects if they fear an economic slowdown is on the horizon.

The portfolio

Steenberger portfolio cw 9

The portfolio had some headwinds and ended on -1.23%. The SEK strengthened against USD, EUR, and CHF.

Transactions

I exited Silver S locking in a small profit of 6.34%, and I also closed the position in Ericsson B (OMXSTO:​ERIC_B) with a gain of 10.41%. I added into Enea (OMXSTO:​ENEA) using a part of the cash position.

Trimming Guld S during the week with a gain of 5.16% and added some more weight to Palladium S.

The depots in the portfolio

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