The impact of imports from China on US manufacturing jobs

The impact of U.S.-China trade relations has been significant over the years. In the 1970s, diplomatic relations were reestablished, but it was not until the 1990s that trade between the two countries started to expand. The growth in U.S.-China trade has been substantial, with imports from China accounting for a significant portion of all U.S. imports and exports. The U.S. government’s policies favoring international trade and the granting of normal trade relations to China played a role in this increase.

The composition of imports and exports between the U.S. and China reveals clear patterns. China has a comparative advantage in industries such as furniture, textiles, apparel, and electronics, accounting for a significant share of U.S. imports in these categories. U.S. exports to China, on the other hand, are more concentrated in agriculture and forestry products.

The rise in trade with China has raised concerns about its impact on U.S. employment, particularly in the manufacturing sector. Studies suggest that the increase in imports of Chinese goods has contributed to significant declines in U.S. manufacturing jobs. Industries facing stronger competition from Chinese goods have experienced contractions in employment relative to others.

The U.S.-China trade war, which began in 2018, disrupted the growth in trade between the two countries. The U.S. imposed tariffs on Chinese imports, leading to a decline in imports from and exports to China. However, trade has partially recovered in recent years, driven by increased U.S. consumption during the pandemic and imports from China that were not subject to tariffs.

The provided chart depicts the areas in manufacturing employment that have been affected by imports from China. It is evident that the sectors most significantly impacted are apparel and accessories, as well as computer and electronic products. These sectors are characterized by labor-intensive processes, which makes them more vulnerable to competition from Chinese imports. On the other hand, capital-intensive sectors show relatively less impact. It is worth noting that the Food and Kindred products sector actually experienced a positive effect on employment, suggesting a favorable outcome in that particular area.

Source: https://www.stlouisfed.org/annual-report/2022/shifting-tides-global-trade

The impact of Monetary Policy on Asset Prices

During the pandemic, the Federal Reserve (Fed) implemented three monetary policy tools to influence asset prices:

• Lowering interest rates: This made it cheaper for businesses and consumers to borrow money, which led to increased investment and spending.
• Increasing the balance sheet through quantitative easing: This injected money into the economy, which boosted asset prices.
• Signaling the intention to keep interest rates low for an extended period: This gave investors confidence that the economy would continue to grow, which also boosted asset prices.

These measures proved highly effective as asset markets experienced unprecedented growth. Typically, the Fed does not utilize all three methods simultaneously but rather relies on one or two depending on the circumstances. However, due to the unique circumstances of the pandemic, the Fed employed all three methods, resulting in a significant increase in inflation and a decrease in workforce participation as many individuals retired and did not return to work.

Currently, the Fed is taking steps to tighten the money supply in order to curb inflation rates. This involves:

• Raising interest rates: This will make it more expensive for businesses and consumers to borrow money, which will slow the economy and help to reduce inflation.
• Reducing the balance sheet through quantitative tightening: This will remove money from the economy, which will also help to reduce inflation.
• Signaling to the market that interest rates will remain high for a period of time: This will give investors confidence that the Fed is serious about reducing inflation, which will help to anchor inflation expectations.

However, there is skepticism in the market regarding the effectiveness of these signals. In order for the Fed’s monetary policy to be impactful, it requires a strong and unified message from all committee members in the Federal Open Market Committee (FOMC).

It is important to note that the efficacy of the Fed’s current efforts relies on consistent messaging and a unified stance among FOMC members. If the Fed appears to be divided or if its messaging is inconsistent, it will be more difficult to achieve its goals of reducing inflation and stabilizing the economy.

Personal Consumption Expenditures: Chain-type Price Index (PCEPI) as of April, 2023

The chart below illustrates the PCE (Personal Consumption Expenditures) and Core PCE (PCE excluding food and energy) figures as of April 2023. Both PCE measures experienced a slight increase compared to the previous month. Specifically, PCE stood at 4.36%, while Core PCE reached 4.7% in April 2023. It is noteworthy that PCE underwent a decline from the mid-5% range to the mid-4% range between February and March. Based on these observations, it is anticipated that PCE will likely remain around the 3-4% mark for the upcoming months.

Source: https://fred.stlouisfed.org/series/PCEPI

Source: https://fred.stlouisfed.org/series/PCEPILFE

library(quantmod)
library(ggplot2)

Personal Consumption Expenditures: Chain-type Price Index (PCEPI)

Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) (PCEPILFE)

Download PCEPILFE

getSymbols(“PCEPILFE”, src = “FRED”, from = “2000-01-01”, to = Sys.Date())

Download PCEPI

getSymbols(“PCEPI”, src = “FRED”, from = “2000-01-01”, to = Sys.Date())

Merge the datasets based on the “Date” variable

merged_data <- merge(PCEPI, PCEPILFE, by = “Date”)

Plotting the merged data

plot(merged_data[, c(“PCEPI”, “PCEPILFE”)], main = “PCEPI and PCEPILFE Over Time”, col = c(“blue”, “red”),
xlab = “Date”, ylab = “Value”, type = “l”, lwd = 2,
legend.text = c(“PCEPI”, “PCEPILFE”), legend.position = “topright”)

Check the lengths of ‘Date’ and ‘PCEPI’ vectors

length(merged_data$Date)
length(merged_data$PCEPI)

Print the structure of the merged_data object

str(merged_data)

library(xts)

Convert the merged data to an xts object

merged_xts <- xts(merged_data[, c(“PCEPI”, “PCEPILFE”)])

merged_xts

Plot the data

plot(merged_xts, main = “PCEPI and PCEPILFE”, ylab = “Value”, col = c(“blue”, “red”))

library(quantmod)

Calculate the percentage changes for each variable

percentage_changes <- lapply(merged_xts, Delt, k = 12, type = “arithmetic”)

Get the variable names from the percentage_changes list

variable_names <- names(percentage_changes)

percentage_changes

Plot the percentage changes

plot(percentage_changes$PCEPI, main = “Percentage Changes from Previous Year”, ylab = “Percentage Change”, col = “blue”)
lines(percentage_changes$PCEPILFE, col = “red”)
legend(“topleft”, legend = variable_names, col = c(“blue”, “red”), lty = 1)

Add text annotations for the latest values

last_date <- index(percentage_changes)[length(index(percentage_changes))]
last_values <- tail(percentage_changes, 1)

text(last_date, last_values$PCEPI, round(last_values$PCEPI, 2), pos = 3, col = “blue”)
text(last_date, last_values$PCEPILFE, round(last_values$PCEPILFE, 2), pos = 3, col = “red”)

library(ggplot2)

Convert the percentage changes to a data frame

df <- data.frame(Date = index(percentage_changes$PCEPI),
PCEPI = percentage_changes$PCEPI,
PCEPILFE = percentage_changes$PCEPILFE)

tail(df)

Create the plot using ggplot2

ggplot(df, aes(x = Date)) +
geom_line(aes(y = Delt.12.arithmetic100, color = “PCEPI”), size = 1) + geom_line(aes(y = Delt.12.arithmetic.1100, color = “PCEPILFE”), size = 1) +
labs(title = “Percentage Changes from Previous Year”, y = “Percentage Change”) +
scale_color_manual(values = c(“blue”, “red”)) +
theme_minimal() +
geom_text(data = tail(df, 1), aes(x = Date, y = Delt.12.arithmetic, label = paste0(round(Delt.12.arithmetic100, 2), “%”)), vjust = -1, color = “blue”) + geom_text(data = tail(df, 1), aes(x = Date, y = Delt.12.arithmetic.1, label = paste0(round(Delt.12.arithmetic.1100, 2), “%”)), vjust = 1, color = “red”)

U.S. Stock Market as of 05-12-2023

The DJIA (Dow Jones Industrial Average) is one of the most widely recognized stock market indexes. It represents the performance of 30 large, publicly traded companies in the United States, spanning various industries. The DJIA is often used as a barometer of the overall health and direction of the U.S. stock market.

The S&P 500 (Standard & Poor’s 500) is another major stock market index that is widely followed. It includes 500 large-cap companies listed on U.S. stock exchanges, covering a diverse range of sectors. The S&P 500 is considered a broader measure of the U.S. stock market compared to the DJIA due to its larger number of constituents.

The NASDAQ Composite (NASDAQCOM) is an index that tracks the performance of more than 3,000 stocks listed on the NASDAQ stock exchange. It is known for its heavy weighting towards technology companies, making it a popular benchmark for the performance of the technology sector and growth-oriented stocks.

The WILL5000PR (Wilshire 5000 Total Market Index) is a broad-based stock market index that includes nearly all publicly traded stocks in the United States. It covers stocks of all market capitalizations, providing a comprehensive view of the U.S. stock market as a whole.

The NASDAQ 100 (NASDAQ100) is a subset of the NASDAQ Composite index and represents the performance of the 100 largest non-financial companies listed on the NASDAQ exchange. It is heavily focused on technology-related stocks and is often used as a gauge for the performance of large-cap technology companies.

The WILLREITIND (Wilshire U.S. Real Estate Investment Trust Index) is an index that tracks the performance of real estate investment trusts (REITs) in the United States. It includes companies involved in various sectors of the real estate industry, such as residential, commercial, and industrial properties. The index serves as a benchmark for the performance of the U.S. REIT market.

These stock market indexes provide investors and analysts with insights into the overall performance and trends in different sectors of the U.S. stock market. Monitoring their movements and comparing their performances can help assess the health of the economy and guide investment decisions.

The following chart displays the performance of stock market indexes in 2023. It is notable that most of the stock market indexes have rebounded this year compared to the previous year. Among the stock indexes, NASDAQ100 has shown remarkable growth, outperforming the other indexes. In fact, NASDAQ100 has performed three times better than Will5000PR.

Despite a recovery in the stock market during 2023, it is important to note that the indexes have not yet fully regained their peak levels from 2021. The NASDAQ100, for instance, remains 20% below its highest point. Similarly, the DJIA is still down by 10% from its peak, while the S&P 500 is down by 14% and the NASDAQ is down by 13%. Additionally, the WILL5000PR is currently 15.5% below its highest point. These figures highlight that although progress has been made, there is still some ground to cover in order to reach the previous peak levels observed in 2021.

Accenture (ACN)

Accenture is a global professional services company that offers solutions in consulting, strategy, digital technology, and operations. With a presence in over 120 countries, Accenture is a leader in the industry, catering to clients across various sectors. The company assists organizations in navigating complex business challenges and implementing innovative strategies to drive growth and success. Accenture leverages cutting-edge advancements to enable digital transformation for its clients.

Accenture (ACN) is a global professional services company that provides a wide range of services in strategy, consulting, digital, technology, and operations. The financial measures provided give us insights into the company’s financial performance and valuation. Let’s analyze each measure:

1. EPS (Earnings Per Share): The EPS for Accenture is $10.87. EPS is a commonly used financial measure that indicates the profitability of a company on a per-share basis. Higher EPS values generally indicate higher profitability.
2. Price to Earnings Ratio (P/E Ratio): The P/E ratio for Accenture is 25.5005. The P/E ratio is a valuation ratio that compares the market price per share to the company’s earnings per share. A higher P/E ratio suggests that investors have higher expectations for future earnings growth.
3. Price to Book Ratio (P/B Ratio): The P/B ratio for Accenture is 7.36365. The P/B ratio compares the market price per share to the company’s book value per share. A higher P/B ratio can indicate that investors expect higher future returns on equity.
4. Dividend Yield (%): The dividend yield for Accenture is 1.62%. Dividend yield represents the annual dividend payout as a percentage of the stock’s current market price. A higher dividend yield indicates a higher return on investment for shareholders through dividends.
5. Return On Equity (ROE %): The ROE for Accenture is 30.949%. ROE measures the company’s profitability by assessing how effectively it generates profits from shareholders’ equity. A higher ROE indicates better utilization of equity investment.
6. Debt to Equity Ratio: The debt to equity ratio for Accenture is 13.119. This ratio compares the company’s total debt to shareholders’ equity and indicates the proportion of debt financing relative to equity financing. A higher ratio may imply higher financial risk.
7. Free Cash Flow: Accenture’s free cash flow is $8,329.61 million. Free cash flow measures the cash generated by the company’s operations after deducting capital expenditures. Positive free cash flow is a good sign as it indicates the company has cash available for growth, dividends, or debt reduction.
8. Market Capitalization: Accenture’s market capitalization is $175,054 million. Market capitalization represents the total market value of a company’s outstanding shares. It is calculated by multiplying the current stock price by the total number of shares outstanding.
9. Revenue Growth (%): Accenture’s revenue growth rate is 5.1%. Revenue growth measures the percentage increase in a company’s revenue from one period to another. Positive revenue growth suggests that the company is expanding its business and generating more sales.
10. Operating Margin (%): Accenture’s operating margin is 15.288%. The operating margin is a profitability ratio that indicates the percentage of revenue left after deducting operating expenses. A higher operating margin suggests that the company is efficiently managing its costs.

These financial measures provide a snapshot of Accenture’s financial health, profitability, valuation, and growth potential. Investors and analysts often use these measures to assess the company’s performance and make informed investment decisions. It’s important to consider these measures in conjunction with other relevant factors and conduct further analysis to gain a comprehensive understanding of the company’s financial position.

The financial measures of Abbott Labs (ABT)

Abbott Labs is a healthcare company that develops, manufactures, and distributes healthcare products and services. Founded in 1888, it is headquartered in Abbott Park, Illinois, USA, and has a presence in over 160 countries. With a diverse portfolio of products, Abbott Labs covers medical specialties such as diagnostics, medical devices, nutrition, and pharmaceuticals. Its well-known brands include Similac, Pedialyte, FreeStyle Libre, and MitraClip. The company’s Diagnostics division provides diagnostic solutions for healthcare professionals and patients, including molecular diagnostics and point-of-care testing.

The accompanying charts depict the financial performances of Abbott Laboratories (ABT) in relation to the S&P 100 stocks. When examining the financial measures, it is apparent that Abbott Laboratories falls within the middle range of the S&P 100 stocks. In the charts, the red vertical line represents the financial measures of ABT, while the green dot vertical lines indicate the average financial measures of the S&P 100 stocks. Additionally, the blue dot vertical lines represent the median financial measures of the S&P 100 stocks.

Global semiconductor sales total in 2022

According to the Semiconductor Industry Association (SIA), global semiconductor sales totaled $574.1 billion in 2022. This was an increase of 3.3% from the previous year. The top three markets for semiconductors were:

• Computing: $200.5 billion
• Communications: $159.9 billion
• Consumer: $113.7 billion

The semiconductor industry is expected to continue to grow in the coming years. The SIA projects that global semiconductor sales will reach $1 trillion by 2030. This growth will be driven by the increasing demand for semiconductors in new and emerging applications, such as artificial intelligence, 5G, and the Internet of Things.

There are a few reasons why the sales of semiconductors increased so much in 2018.

• The rise of artificial intelligence (AI). AI is a rapidly growing field that is driving demand for semiconductors. AI-powered applications are becoming increasingly common in a wide range of industries, including healthcare, finance, and manufacturing.
• The growth of the cloud computing market. Cloud computing is another rapidly growing market that is driving demand for semiconductors. Cloud computing providers need to invest in large amounts of computing power to support their customers’ workloads.
• The increasing popularity of smartphones and other mobile devices. Smartphones and other mobile devices are becoming increasingly powerful and sophisticated, which is driving demand for more powerful semiconductors.
• The expansion of the Internet of Things (IoT). The IoT is a network of physical objects that are connected to the internet. These objects, such as sensors and actuators, generate a massive amount of data that needs to be processed by semiconductors.

These are just a few of the reasons why the sales of semiconductors increased so much in 2018. It is likely that demand for semiconductors will continue to grow in t

Intel (INTC) stock as of 5/11/2023

Intel Corporation (INTC) is an American multinational technology company and one of the world’s largest semiconductor chip manufacturers. Founded in 1968, Intel has played a significant role in shaping the global technology landscape and is renowned for its innovation in the field of microprocessors.

The following charts depict the financial measures of Intel Corporation in comparison to the financial measures of S&P 100 stocks. Upon analyzing these charts, it becomes evident that several financial measures of Intel fall below the median values of the S&P 100 stocks’ financial measures. This observation implies that Intel’s financial status is relatively weak. In fact, numerous financial measures, such as EPS (Earnings Per Share) and revenue growth, exhibit negative values, indicating that the company is currently experiencing financial losses.

While the financial measures of Intel stock may currently be unfavorable, the semiconductor industry shows a promising future. Projections indicate that semiconductor sales are expected to reach $1 trillion by 2030. This significant growth is primarily attributed to the rising demand for semiconductors in innovative and emerging fields such as artificial intelligence and 5G technology.

Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category, April 2023

The U.S. Bureau of Labor Statistics (BLS) Consumer Expenditure Survey for 2019 reveals that housing expenses made up around 33.1% of total expenditures for the average U.S. consumer unit. Additionally, the BLS reports that in 2019, U.S. consumers spent approximately 12.9% of their household expenditures on food. Lastly, the survey shows that apparel expenses accounted for roughly 2.8% of total expenditures for the average U.S. consumer unit.

Food, housing, and apparel are essential goods for survival. Despite a drop in the core Consumer Price Index (CPI) below 5%, the CPI for these categories remains high and persistent. Additionally, the CPI for services continues to be relatively higher compared to other categories.

The following chart displays the percentage changes of CPI from previous month.

The Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.4 percent in April, following a 0.1 percent increase in March, according to the U.S. Bureau of Labor Statistics. Over the past 12 months, the overall index rose by 4.9 percent before seasonal adjustment.

The main contributors to the monthly increase in the all items index were the index for shelter, which had the largest impact, followed by increases in the index for used cars and trucks, and the index for gasoline. The rise in the gasoline index offset declines in other energy component indexes, resulting in a 0.6 percent increase in the energy index for April. The food index remained unchanged, with a 0.2 percent decrease in the index for food at home and a 0.4 percent increase in the index for food away from home.

Excluding food and energy, the index for all items rose by 0.4 percent in April, mirroring the increase seen in March. Categories that experienced increases in April include shelter, used cars and trucks, motor vehicle insurance, recreation, household furnishings and operations, and personal care. On the other hand, the index for airline fares and the index for new vehicles showed decreases over the month.

Looking at the 12-month period ending in April, the all items index increased by 4.9 percent, marking the smallest increase since April 2021. The index for all items, excluding food and energy, rose by 5.5 percent over the same period. The energy index decreased by 5.1 percent, while the food index increased by 7.7 percent over the past year.

The following charts show the percentage changes from same month in previous year.

. According to the U.S. Bureau of Labor Statistics (BLS), in 2019, the average share of household expenditures spent on food by U.S. consumers was approximately 12.9%.

Source: : https://www.bls.gov/news.release/cpi.t01.htm

Pfizer Inc as of 05-09-2023

Pfizer Inc. (PFE) is a multinational pharmaceutical company based in the United States. Here are some key points about Pfizer:

Upon my friend’s request, I conducted an analysis of Pfizer’s stock performance. During the pandemic, the stock witnessed a significant increase of 66%. This surge represents nearly four years’ worth of annualized returns, considering the average annualized return of 15.45%. However, following the end of the pandemic, the stock started to experience a decline, with the downward pressure outweighing the upward pressure.

Nevertheless, it is worth noting that the stock’s future trajectory may be influenced by the Federal Reserve’s actions regarding interest rates. If the Fed decides to decrease interest rates, it could potentially stimulate a rise in the stock’s value.

When comparing Pfizer’s financial performance measures to those of the S&P 100 stocks, it becomes evident that although the company’s Earnings per Share (EPS) is reasonable, the stock appears to be undervalued. Additionally, Pfizer offers a higher dividend yield compared to the average dividend yields of other stocks.

Considering these factors, if one is willing to endure short-term price declines, holding Pfizer stock for the longer term can prove to be a beneficial investment due to its attractive dividend yield. It is important, however, to regularly monitor the company’s financial performance and stay updated with market conditions to make informed investment decisions.

 Here is the table displaying some common financial measures of Pfizer (PFE) stock:

+--------------------------------------------+--------------+
| Financial Measure                          |        Value |
+============================================+==============+
| EPS                                        |      5.07    |
+--------------------------------------------+--------------+
| Price to Earnings Ratio                    |      7.62722 |
+--------------------------------------------+--------------+
| Price to Book Ratio                        |      2.27017 |
+--------------------------------------------+--------------+
| Dividend Yield (%)                         |      4.26    |
+--------------------------------------------+--------------+
| Return On Equity (%)                       |     33.253   |
+--------------------------------------------+--------------+
| Debt to Equity Ratio                       |     20.079   |
+--------------------------------------------+--------------+
| Free Cash Flow (in million dollars)        |  45057.9     |
+--------------------------------------------+--------------+
| Market Capitalization (in million dollars) | 218269       |
+--------------------------------------------+--------------+
| Revenue Growth (%)                         |     -4.3     |
+--------------------------------------------+--------------+
| Operating Margin (%)                       |      0       |
+--------------------------------------------+--------------+



The first chart displays the historical stock prices of Pfizer Inc. (PFE), providing a visual representation of its past performance. 

The second chart focuses on the stock prices of Pfizer (PFE) from 2018 to the present, giving insight into its more recent performance. 

Analyzing the data, it is observed that Pfizer has delivered an average annualized return of 15.46% over the examined period. 

During the pandemic, Pfizer experienced a notable surge, with its stock price rising by 66.7%. This increase can be attributed to the company's significant involvement in the development and distribution of the Pfizer-BioNTech COVID-19 vaccine. 

However, following the end of the pandemic, Pfizer's stock price began to decline. It's important to note that stock prices can be influenced by various factors, including market dynamics, investor sentiment, and company-specific events.

Please keep in mind that past performance is not indicative of future results, and it's always advisable to conduct thorough research and analysis before making any investment decisions.

The following charts provide a comparison of key financial measures between Pfizer stocks and the S&P 100 stocks.

When analyzing Pfizer’s financial measures, it is observed that the company’s Earnings per Share (EPS) stands at $5.07. This places Pfizer in the 49.49th percentile among the performance measures of S&P 100 stocks, indicating a relatively favorable EPS compared to its peers.

The Price to Earnings (P/E) ratio for Pfizer is calculated at 7.63, placing it in the 6.32nd percentile among the S&P 100 stocks. This relatively low P/E ratio suggests that the stock may be undervalued compared to other companies in the index.

Furthermore, Pfizer’s Price to Book (P/B) ratio is calculated at 2.27, positioning it in the 29.67th percentile. This ratio signifies the market’s valuation of the company relative to its book value, with Pfizer showing a moderately favorable ratio compared to the S&P 100 stocks.

In terms of market capitalization, Pfizer’s market cap is reported as $218.26 billion, placing it in the 72nd percentile among the S&P 100 stocks. This indicates a relatively high market cap compared to other companies in the index.

Additionally, Pfizer offers a dividend yield of 4.26%, placing it in the 84.52nd percentile among the S&P 100 stocks. This suggests that Pfizer’s dividend yield is relatively attractive compared to its peers.

It’s important to note that these percentiles reflect the performance measures of Pfizer in relation to the S&P 100 stocks. Financial measures can vary over time, and it’s advisable to refer to the most recent data and consult reputable financial sources for accurate and up-to-date information.

The Price to Earnings (P/E) ratio for Pfizer is calculated at 7.63, placing it in the 6.32nd percentile among the S&P 100 stocks. This relatively low P/E ratio suggests that the stock may be undervalued compared to other companies in the index.

Furthermore, Pfizer’s Price to Book (P/B) ratio is calculated at 2.27, positioning it in the 29.67th percentile. This ratio signifies the market’s valuation of the company relative to its book value, with Pfizer showing a moderately favorable ratio compared to the S&P 100 stocks.

In terms of market capitalization, Pfizer’s market cap is reported as $218.26 billion, placing it in the 72nd percentile among the S&P 100 stocks. This indicates a relatively high market cap compared to other companies in the index.

Additionally, Pfizer offers a dividend yield of 4.26%, placing it in the 84.52nd percentile among the S&P 100 stocks. This suggests that Pfizer’s dividend yield is relatively attractive compared to its peers.