Good Afternoon Everyone,

SO, Friday our markets finished down by 2.51% and 2.2% of it came in the last hour of the market being open.  The tech heavy Nasdaq finished down 3.6% on Friday.  What happened?  Trump threatened again 100% plus tariffs against China to start Nov 1st  "on any and all critical software" pushing tech stocks lower on Friday.  China put major tariffs on rare earth metals Friday so Trump retaliated to an equal measure as China did to the U.S.A.  The leaders were supposed to meet here in a couple of weeks in South Korea and we thought we would have a trade deal in place before the end of the year.  Now Trump felt that China was becoming very hostile, which they were with the new rare earth metals tariffs against the US, so he fired back.  Equal or reciprocating tariffs are so hard on other countries as we have so much money.  No we will never be at an equal trading balance with most countries but for the 2nd largest economy we shouldn't be in a trillions of dollar deficit.   You can't say we aren't being fair or unjust as we are reciprocating the tariffs the other counties are already placing on us.  Even if they are a small island country IF they feel they can and should tariff the USA then expect to receive the same treatment you've already demonstrated to the USA.  

So now we come to the TACO trade = Trump Always Chickens Out.  IS this posturing before the meeting with Xi?  Probably and we've only seen this no less than a dozen times in the last year against many different countries.   Does it work?  Hell yes it works and it works perfectly to create a more balanced free market capitalism trade between countries.  It is not morally or criminally wrong to make a lot of money.  People aren't bad people who have worked hard and are "rich".  The same principle is true for countries as well.  It is not the responsibility of the USA to fund other countries as we are spending beyond our means.  Will Trump follow through with the tariffs? Probably not.  But, if he does it is not necessarily a bad thing.  If anything it is fair as we are offering the same treatment that their country continues to do to the USA.   

How does this affect Hurley Investments and the market?  Well thank goodness we had prepared for earnings a little early this year for the pre-Christmas Rally drop.  This drop will give us a nice run into the end of the year as the market just lost 1/6th of the yearly gains !!!!  It set up a catch up run into the end of the year.  Good earnings will push some stocks higher and this time of the year favors technology stocks, marketing or click stocks, social media stocks, and retail stocks!  80% of our positions were and have been protected in some way, shape or form as of last Wednesday so we are in really good shape.  Yes we had a big down day but as we move forward we will be making up more and more of the downward movement.  Friday we made up about 55% of the downward movement and if we have the same movement down on Monday we should make up about 70% of the downward movement and the percentages should continue to move higher.  Our goal is to maintain the accounts gains this year and maybe even over-protect so that we end tripling the S&P 500 gains this year.  Look for more protection to be added and then most likely we will be taking a nice profit as the TACO trade takes place and tariffs are pushed further down the road.  

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Kevin Hurley
Managing Partner - Hurley Investments
43 West 300 North
Provo UT 84601
Toll Free: 888-287-1030
www.hurleyinvestments.com