It’s getting noisy in here.  The beating drum of trade conflict gets louder as there is another day and another tariff.  It seems the Trump administration did not get the response it wanted with $50bln targeted at China.  So days later, we are talking about adding another $100bln.  Clearly the financial markets do not like the uncertainty posed by this ongoing dispute, but it will likely have to live with it for a while longer.  Newly installed National Economic Advisor Larry Kudlow and Treasury Secretary Mnuchin have spent the past few days trying to calm concerns that, while the President is serious about these actions, there is time for negotiation and settlement of the key issues (intellectual property protection and market access) before they take effect.  Who knows what else will unfold over that time?  Financial capital will never get a medal for bravery as traders sold first and will figure out the questions later.

With all of this, will investors be able to hear how companies performed in the first quarter as they announce in coming weeks?  According to Bank of America research, US equity sales growth year-over-year in Q1 is expected to be +7% with more than 2% (roughly 28%) from currency translation from the weaker dollar.  Contrary to the standard historical pattern, earnings estimates for Q1 are moving higher as we enter announcement season.  Expectations are for +17% year-over-year earnings growth and a 15% jump over the prior quarter.  Even with revisions upward, there may still be positive surprises when managements release actual numbers.  Now that would be a series of “beats” to get excited about.