“Davidson” submits:

Major policy changes are having economic impacts.

1^st-Regulation reductions occurred in 2017 and continue today. A positive multi-year impact.

2^nd– Tax reductions began in 2018 and have a positive multi-year impact.

3^rd-Sanctions against disruptive autocrat-led governments have gradually ramped higher resulting a stronger US$.

4^th– The shift towards global tariff reductions is a new policy initiative which has likely contributed to a stronger US$.

So much change in the process without a clear outcome in view. How do we adjust portfolios to be best positioned? Taking the various outcomes one at a time and signals from the economic data provide useful insight. At the moment conditions remain decently positive and could even turn more positive should initiatives produce hoped for outcome.

Outcomes that have occurred and what appears likely to occur:

Points 1: Fewer regulations lower costs to businesses and leaves room to hire more employees where needed and/or raise employee pay. Some of this has been in the headlines.

Point 2: Lower taxes raise incomes for individuals and businesses. The multi-year benefit should be obvious.

Points3&4: We have seen a recent rise in the US$ Index which shows some shifting of capital to US$ assets as sanctions have been applied against No. Korea, Russia, Turkey, Iran, and Venezuela. The tariff issues are also having some impact on where capital sees the better opportunities.

At issue for the US businesses is the impact a rise in US$ has on exports. But, US$, currently at 90, has not risen to the 95 level which created the industrial recession 2014-2016. In every well-managed US manufacturing company, major adjustments occurred with costs lowered. They became more competitive and business has resumed with a surge of new orders. US businesses have a tradition of meeting market disruption with a new competitive attitude. The phenomena of ‘The Leaning of US Manufacturing’ continues as a dominant theme.