Shortly after President Trump announced a withdrawal from the Paris Accord, markets continued to push higher. The Dow Jones Industrials raced from a low of 21,000 to a high of 21,206.
The NASDAQ ran from a low of 6,222 to 6,302, and the S&P 500 rocketed from 2,415 to 2,439.
That all happened within the first two days of the announcement, which made a strong case for renegotiating a better, fairer deal for America.
According to Trump:
“We’re going to be paying billions and billions and billions of dollars, and we’re already way ahead of anybody else. Many of the other countries haven’t spent anything, and many of them will never pay one dime. Compliance with the terms of the Paris Accord and the onerous energy restrictions it has placed on the United States could cost America as much as 2.7 million lost jobs by 2025 according to the National Economic Research Associates. This includes 440,000 fewer manufacturing jobs -- not what we need -- believe me, this is not what we need -- including automobile jobs, and the further decimation of vital American industries on which countless communities rely. They rely for so much, and we would be giving them so little.”
His other argument was that such restrictions could severely cut production for the paper industry, cement, iron, steel, coal and natural gas, by 2040. He also noted that the current deal imposes no meaningful obligations on the world’s leading producers.
“Under the agreement, China will be able to increase these emissions by a staggering number of years -- 13. They can do whatever they want for 13 years. Not us. India makes its participation contingent on receiving billions and billions and billions of dollars in foreign aid from developed countries. There are many other examples. But the bottom line is that the Paris Accord is very unfair, at the highest level, to the United States. China will be allowed to build hundreds of additional coal plants. So we can’t build the plants, but they can, according to this agreement. India will be allowed to double its coal production by 2020. Think of it: India can double their coal production. We’re supposed to get rid of ours. Even Europe is allowed to continue construction of coal plants.”
Plus, according to The Wall Street Journal, to meet the current goals, the Environmental Agency would have to impose heavy emissions controls on steel production, farm soil and even enteric fermentation (cow gas) – sad but true.
The Street reacted favorably to the news because Trump was simply asking for a renegotiation of terms, which could favor the U.S. and related corporations. As a result, energy companies, industrial companies, and even automakers could benefit from lower environmental costs, too.
While this may be one of the most hotly contested issues at the moment, we must also be aware of the investment opportunities it may create. In fact, The Cheap Investor is looking into several oversold opportunities as we speak.