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Research Vlog: NAFTA

05.07.2018 | Ben Phillips, CFA
The Ultimate NAFTA Cheat Sheet
 


 

 

 

This Week's Highlights


  • The emergence of China tariffs and a potential trade war over the past month have pushed NAFTA negotiations out of the media’s spotlight.

 

  • We believe the automotive rule of origin threshold will be increased. U.S. automotive parts manufacturers may benefit from a higher threshold, while car companies may need to relocate factories and reconfigure supply chains.

 

  • Kansas City Southern (KSU): Railroad transportation company with operations in the Midwest, Mexico, and Panama. Its an integral part of the U.S.-Mexico supply chain for the automotive, chemical, agriculture, and energy industries. In our view, KSU benefits from NAFTA continuation.

 

  • Automakers: Ford (F), General Motors (GM), Toyota (TM), and Fiat Chrysler (FCAU) may be negatively impacted if management teams need to select new parts suppliers or build new factories to meet a higher NAFTA content threshold.

 

  • We are optimistic of a NAFTA agreement in principle by July, which would relieve some market uncertaintyRead about other 2Q'18 legislative items we are following.

 

 

Read More: NAFTA Cheat Sheet.

 

 

 


 

 

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Important Information

Active Weighting Advisors LLC ("AWA") is an SEC-registered investment adviser that manages ETFs under the brand name EventShares Funds. Mr. Phillips is the Chief Investment Officer of AWA. The views expressed are subject to change, and no forecasts can be guaranteed. The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. AWA is not soliciting any action based on this document. In preparing this document, the author has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Investing involves risk, including the possible loss of principal and fluctuation of value. Mr. Phillips and AWA disclaim responsibility for updating information. In addition, Mr. Phillips and AWA disclaim responsibility for third-party content, including information accessed through hyperlinks. For more information about EventShares, contact us by calling 877.539.1510 or visit our website at www.EventShares.com.

 

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Policy investing focuses on understanding the laws and regulations that impact companies. It attempts to find mispriced assets and invest in those companies before the market understands the implications to a company’s profitability and operations.