Stocks Drop as Tariffs Rise

Weekly Update – March 26, 2018

Markets experienced significant declines last week. The S&P 500 lost 5.95%, the Dow dropped 5.66%, and the NASDAQ declined 6.54%. [1] With these losses, all 3 domestic indexes had their worst weekly performance in more than 2 years. [2] International stocks also declined, with the MSCI EAFE giving back 2.64% .[3]

What caused markets to stumble in this way? While various economic reports came out and the Federal Reserve raised rates again, another topic triggered the declines: trade war concerns. [4]

Weekly Focus: Analyzing Tariffs and Trade Wars

What happened?

Last week, President Trump approved new tariffs on China as a punishment for taking American intellectual property. The tariffs could affect as much as $60 billion in Chinese imports – and Trump called this the “first of many” trade actions against the country. [5] 

China indicated that it may retaliate and is “looking at all options” on how to respond. Apparently, everything is on the table – including targeting 128 American products, no longer purchasing U.S. Treasuries, and taking legal action through the World Trade Organization. [6]

How did investors respond?

The new China-specific tariffs combined with Trump’s steel and aluminum tariffs earlier this month create growing concerns about a trade war. [7] The market declines we experienced last week are largely a reaction to these fears. [8]

What might happen next?

These new tariffs have the potential to create 2 very different results:

1.  A trade war that stifles global growth
2.  A more even playing field for American companies
A trade war: If the U.S. and China go back-and-forth adding punitive tariffs to each other’s products, our economy could suffer. We could experience inflation, slower economic development, and higher interest rates, making expansion and growth harder for U.S. businesses. [9] 
A more even playing field: If the tariffs are successful, U.S. industries could benefit. Some U.S. steel producers are already boosting their production and hiring as the first round of tariffs goes into effect. [10] 
In the meantime, we continue to be bearish with the intention of avoiding losses during this uncommon volatility. We will remain in a full cash position in our managed portfolios until we see a clear direction in the financial markets
If you have questions about how these geopolitical changes could affect your financial life, we are always here to talk.
Tuesday: Consumer Confidence
Wednesday: GDP, International Trade in Goods
Thursday: Jobless Claims, Consumer Sentiment
Friday: U.S. Markets Closed for Good Friday
Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
Quote Of The Week
It is better to have a permanent income than to be fascinating.”
– Oscar Wilde
Recipe Of The Week
Jump-Start Smoothies
Serves 2
  • 1 cup frozen strawberries
  • ½ cup fresh blueberries
  • ½ cup fresh orange juice
  • 2 teaspoons chopped and peeled fresh ginger
  • ¼ cup plain low-fat (1 percent) yogurt
  • 2 ice cubes


  1. Put strawberries, blueberries, orange juice, ginger, yogurt, and ice cubes in a blender.
  2. Blend until smooth. Occasionally, scrape down sides of the blender.
  3. Serve.

Recipe adapted from Good Housekeeping [12]

Healthy Lifestyle

Positioning Yourself for Restful Sleep

You may have heard all the advice about not drinking coffee before bed, keeping your bedroom at a cool temperature, and eliminating distractions. But health experts say your sleep position may be a good indicator of your overall health and your ability to have a good night’s rest.

Unusual or unnatural sleep positions may be causing back pain, snoring, or preventing you from getting a complete night’s rest. Your sleeping position is even a reflection of your personality.

Here are different sleep positions and what they mean to your health and your personality:

  • The Stomach: This one may lead to restless sleep and cause neck strains. Try a softer pillow or none at all.
  • The Belly (Free Fall): This is similar to the stomach position, except you wrap your arms around a pillow with your head turned to the side. Researchers say belly sleepers are social and outgoing, but aren’t very open to criticism. About 7% of people sleep like this.
  • The Back: This one can cause back pain (or make it worse). If you’re a snorer or have sleep apnea, this can exacerbate your problems. Your doctor may be able to help you make adjustments.
  • The Soldier: This is like the back position. Your arms are at your side. You’re sleeping at attention. Researchers say you’re generally quiet and set high expectations for yourself and others. About 8% of people sleep like this.
  • The Starfish: You lie on your back. Your arms are near your head. You’re generally a good listener and like to be the center of attention.
  • The Side: You sleep on your side with your knees close to your chest. This may be the most comfortable side position.
  • The Fetal Position: You’re curled up, sleeping on your side. More than 40% of people, mostly women, sleep this way. Researchers say you’re friendly and sensitive.
  • The Log: You sleep on your side, both arms down, like a “log.” You’re easygoing and trusting.
  • The Yearner: You sleep on your side with your arms in front of you. You’re open-minded, but stubborn and suspicious. About 13% of people sleep this way.
  • The Spoon: This generally requires 2 sleepers. It’s commonly referred to as cuddling. Researchers say it reduces stress and helps you go to sleep faster.

Tip adapted from WebMD [15]

Green Living

Let Your Light So Shine

Hundreds of years ago, our ancestors simply went to bed when it got dark. Thomas Edison and his team of innovators changed the world with the invention of the incandescent light bulb.

Although the light bulb is designed to produce light, only 10% of its energy goes toward making a dark world more visible. The other 90% of the energy generates heat.

Compact fluorescent light (CFL) bulbs, on the other hand, are nearly four times as energy efficient as incandescent bulbs.

Swapping one incandescent light bulb with a CFL one may save 150 pounds of carbon dioxide per year. CFLs use ⅓ of the electricity, lasts nearly 10 times longer as incandescent bulbs, and produce the same amount of light.

Now that’s one bright idea.

Tip adapted from WWF [16]

Zack Alkhamis CRPC, CFS 
Matthew Jarrell, CFS, AIF
Timothy McAfee, CPA, CFP, PPC, MST

The Retirement Wealth Management Group 
7900 Kirkland Court 
Portage, MI 49024 

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