Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Trade Deficit Hits Record Low: -$71.1 Billion

Published 04/06/2021, 10:26 PM
Updated 07/09/2023, 06:31 AM
JPM
-
DIA
-

Wednesday, April 7, 2021

In this morning’s pre-market, we see a new all-time record U.S. Trade Deficit for the month of February, breaching -$70 billion for the first time, to -$71.1 billion. This is even lower than the expected -$70.5 billion and easily takes out the previous all-time low from December 2020, which was -$69.04 billion. The revision to January’s headline improved from -$68.28 billion first reported to -$67.82 billion this time around.

Exports fell 2.6% on primarily industrials, aircraft, semis, food and beverages, while Imports dipped a slower 0.7% on autos and pharma supplies. The Goods deficit now stands at +88 billion, with the Surplus down 0.5% month over month to $16.9 billion. Though this is not a desirable direction to find ourselves in, what it illustrates clearly is that the U.S. economy is recovering from the Covid pandemic quicker than most of its trading partners.

From post-World War II through the mid-1970s, our trade balance was kept strictly dead-even. This loosened notably during the 80s, but really fell off a cliff around the start of the new millennium. The last time we hovered down in this sub-$60 billion range was ahead of the Great Recession, where the bailout that began in 2008/09 righted the ship to a notable extent. This is not to suggest another economic crater is on the horizon because of this, but it will be worth keeping an eye on.

Speaking of keeping an eye on things, this afternoon we will see the minutes of the last meeting of the Federal Open Market Committee (FOMC), which occurred mid-March and cited important touchpoints such as a drastic lessening of Covid infections, a notable increase in vaccinations, and the emerging re-opening of segments of the domestic economy. The game plan has been not to raise interest rates until 2023 in order to encourage growth; analysts will be looking for language that indicates opinions in the FOMC may be changing.

The latest G20 summit — remotely, this time — comes out with a press briefing this morning. While we understand the U.S. has come a long way back from pandemic lows — and we expect Q1 earnings results to demonstrate this clearly — conditions are still dire in many of the countries represented in the G20, such as Brazil (with a nasty new outbreak of infections) and France (difficulties vaccinating citizens at a high rate). While the U.S. may be strong, we look for the day when the global economy has recovered.

Market futures are gingerly in negative territory for the second-straight day, following a robust start to the trading week. JPMorgan Chase’s JPM CEO Jamie Dimon has released a long, detailed message to investors where he discusses the new complexion of the domestic environment — including working and shopping from home practices continuing into the Grand Reopening — and sees strength through 2023. He also talks about higher corporate and individual tax rates accompanying these growth rates.

Questions or comments about this article and/or its author? Click here>>

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Chase & Co. (NYSE:JPM): Free Stock Analysis Report

SPDR S&P 500 ETF (SPY): ETF Research Reports

Invesco QQQ (QQQ): ETF Research Reports

SPDR Dow Jones Industrial Average ETF (NYSE:DIA): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.