Americans’ confidence in the future is at a 3 1/2-year high, according to surveys taken in recent days, but some indicators show their faith in the economy is not entirely unshakable.
Note that investors are voting with their feet, and their dollars. In hopes of reaping big returns overseas, they have been yanking money out of domestic stock mutual funds and shipping money to distant shores.
The troubling theory dovetails with gloomy reports about the nation’s trade deficit, which has mushroomed to nearly $700 billion a year. Everywhere we look, a torrent of Asian-made goods has replaced small items made here.
Replacing American output: foreign money flowing here to acquire prime office buildings and other assets.
That brings us to Friday’s report of the trade shortfall for December. Economist Brian Wesbury expects it to decline for a second month in a row, to around $63.5 billion from $64.2 billion a month earlier.
“Exports for the month grew, while imports held flat, partly because oil prices slipped, at least slightly,” said Wesbury, of First Trust Advisors in Lisle.
“We shouldn’t overlook the fact that we are the world’s biggest exporter, despite the enormous level of imports,” Wesbury said.
Other news to watch:
– Some may consider it a mixed blessing, but Thursday will mark the return of the government’s famed long bond. The Treasury Department is bringing back a debt security it had stopped issuing five years ago when the government’s finances were in better shape. The sale of $14 billion in 30-year bonds is part of a three-day auction that will raise $48 billion for government coffers.
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