How Trump tariffs might hit your wallet and the stock market for years to come

MW How Trump tariffs might hit your wallet and the stock market for years to come

By Philip van Doorn

Also: Estate planning advice from Warren Buffett and why it is never a good time to buy a car.

President-elect Donald Trump has long touted tariffs as a tool to help the U.S. get better deals from trading partners. Consumers and corporate purchasers pay these taxes on imported goods and the higher prices make companies (and countries) exporting to the U.S. less competitive. And President Joe Biden has kept many tariffs place by the first Trump administration in place - especially on China.

But this week Trump moved closer to home, threatening 25% tariffs on all goods imported from Mexico and Canada and tying the tariffs to demands for better border control by both countries.

Tomi Kilgore used Constellation Brands Inc. $(STZ)$ as an example to look into many factors that would affect Trump's policy and price increases on beer brands, such as Modelo and Corona.

Hannah Erin Lang and Venessa Wong marked the start of the holiday shopping season with advice on what to buy ahead of expected tariffs and what to skip.

In this week's On Watch podcast, Jeremy Owens took his own look at holiday shopping ahead of an expected increase in prices.

William Watts explained what investors need to watch ahead of Trump's actual decisions on tariffs.

Related coverage:

-- 10 key takeaways for investors from Trump's latest tariff threats

-- Here's how HP's CEO says the company is thinking about possible tariffs

-- Inflation may reach these levels on Trump tariffs on Canada, Mexico, chart shows

-- 'Tariff Man' Trump returns next year. How nervous are retailers this time around?

-- ETFs that buy stocks in Mexico, Canada, China drop after Trump's tariff threat

What will work for stock-market investors in 2025?

Take a look at the chart above - it makes an argument for long-term investors not to try to time the stock market. Over the past five years, the market has quickly recovered from two broad declines. During 2022, the S&P 500 SPX fell 18.1% with dividends reinvested, followed by a 26.3% return in 2023 and a return of 25.1% so far in 2024. The large-cap U.S. benchmark index has returned 106.7% over the past five years.

So now investors might be wondering if it is possible for U.S. stocks to continue their bull run. Here is recent coverage of varying opinions:

-- Wall Street sees 'no alternative' to U.S. stocks in 2025. Here's why.

-- The stock market overcame these three problems in 2024. Next year it may not be so lucky.

-- Stocks are rallying hard as the economy refuses to buckle. Will it last in 2025?

Advice for managing money

Managing your money is much more involved than selecting investments. Beth Pinsker is a certified financial planner who writes the Fix My Portfolio column, which covers myriad topics, including divorce planning and aftermath, estate planning, eldercare and on and on.

This week she shared practical advice on estate planning from Berkshire Hathaway Chief Executive Warren Buffett. Yes, he is one of the world's wealthiest people, but his advice is useful for anyone preparing a will.

Here are other recent examples from the Fix My Portfolio column:

-- I'm inheriting $600,000. Should I fire my parents' longtime adviser? And what should I do instead?

-- 7 tips from a tax influencer as she approaches retirement at 70

-- My 'warrior' mom, 79, is in rehab after a life-changing fall. How do I win a Medicare appeal to keep her there?

Biotech stock picks as the FDA hits "peak flexibility"

Michael Brush minces no words. Success for investors in biotechnology stocks means selecting companies that will have new medications approved by the Food and Drug Administration. And according to Brian Skorney, an analyst at Baird, the FDA is now at "peak flexibility" for drug approvals.

Here are Brush's four biotech stock picks for a friendlier regulatory environment.

AI might change a market pattern: Nvidia booting Intel from the Dow could end this proven stock-trading strategy

Read on: Trump's return should favor growth stocks. Here are 10 with the most upside, according to analysts.

Two corporate accounting no-nos

Investors should always learn about corporate accounting problems. These have the potential to snowball and crush returns. It also helps to keep informed about possible ways for companies to get into trouble when booking revenue or estimating valuations for their assets. There were two doozies this week, reported by Tomi Kilgore:

-- Macy's employee hid up to $154 million in delivery costs, and stock takes a dive

-- This $22 billion robotics company's stock is tumbling as accounting errors found

Retailers report

Retailers bring up the end of each earnings season, as they tend to have fiscal reporting periods that don't match the calendar. This week the news was mixed:

-- Nordstrom's outlook is a little more upbeat. But it warns of a 'noticeable decline' in sales trends.

-- Urban Outfitters says it doesn't have to discount as aggressively, amid holiday-season optimism

-- Urban Outfitters' stock on track for biggest gain in more than a year, as analysts sense a shift in tone

-- Nordstrom's outlook is a little more upbeat. But it warns of a 'noticeable decline' in sales trends.

-- Kohl's has a new CEO, but not enough of the things its shoppers depend on

-- Abercrombie & Fitch's profit beats analysts' estimates but freight costs loom as stock falls

Don't buy a car

At least, don't "cash out" any of your home equity to buy a car. Or an SUV. Quentin Fottrell - the Moneyist - applies tough love as he explains why a car purchase decision has to be considered in light of your entire financial situation.

More from the Moneyist:

-- 'I've nothing saved for retirement': I'm 50 and earn $45,000. I don't have a 401(k) match. Should I put 10% of my salary in a Roth IRA instead?

-- 'I don't want the government involved in my affairs': My husband lists me as his beneficiary. We don't have children. Do we need a will?

-- 'His divorce lawyer was completely useless': My husband is on the mortgage of his ex-wife's house. She's behind on the loan. What can we do?

A cannabis turnaround attempt

Here is a five-year stock price chart for Canopy Growth Corp. (CA:WEED), which is a marijuana producer based in Canada that also distributes cannabis products through a U.S. subsidiary:

On Tuesday, Canopy named Luc Mongeau - a corporate turnaround specialist and a member of its board of directors - to be its new chief executive.

More cannabis industry news from Steve Gelsi:

-- Hemp-based THC revenue may make cannabis stocks more appealing-but there are risks

-- While legalizing marijuana is in limbo, FDA clears a PTSD study that could boost cannabis stocks over time

A "MoGlicked" weekend

"MoGlicked" was coined by Charles Passy and James Rogers to add "Moana 2," to "Glicked," which had been coined for the releases of "Gladiator II" and "Wicked," to follow the model set by "Barbie" and "Oppenheimer" last year. Here's why this might be a bang-up weekend at the box office.

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-Philip van Doorn

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November 29, 2024 11:43 ET (16:43 GMT)

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