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Stocks , Economy , US Markets

"Trade Deficit's Widely Presumed Effect is 100% Wrong"

The evidence shows that the stock market doesn't care about the U.S. trade deficit

by Bob Stokes
Updated: January 09, 2018

Should investors be bullish on the stock market when the U.S. trade deficit is rising or falling?

Well, conventional wisdom says that a growing trade deficit is bad for stocks. But get this: In November, the U.S. trade deficit rose to its largest imbalance in nearly six years. Yet, the stock market has continued to register one record high after another.

That's right: the widespread notion that a rising trade deficit is negative for stocks is a myth. Yet, this is just one in a long list of market myths.

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