Trump: ‘Smart People’ Are Buying Stocks Right Now

If you, like many market participants, harbor serious reservations about piling into US equities at a time when the economy is headed for the worst downturn since the Great Depression and earnings are poised to collapse, Donald Trump thinks your concerns are misplaced.

Or at least that’s what he suggested on Monday evening, during a press conference in the Rose Garden. “Smart people” are buying stocks right now, Trump contended.

“The third and fourth quarter in particular are going to be spectacular”, he said, in response to a query about Q2, which is almost guaranteed to be the single-worst quarter for the US in the history of modern economic statistics. The advance read on Q1 will be released this week.

To be sure, the president isn’t alone in calling for a “V-shaped” economic recovery. That is, in fact, the consensus narrative and that narrative is enshrined (for better or worse) in the forecasts. 

Looking out to 2021, Trump told the media on Monday that next year will be “unbelievable”.

There’s little doubt about that. After all, each of the last three years has been “unbelievable” in more ways than one, so you’d be foolish to think next year will be any semblance of normal.

Trump assessed that the US economy was the “greatest economy in the history of the world”, during the lengthy harangue.

The president offered an interesting take on the deficit, which is of course set to balloon spectacularly on the back of trillions in virus relief spending (more here and here).

“If you look prior to this virus, the deficit was coming way down under my administration”, he claimed.

That is not true. But Trump proceeded to explain the math behind the falsehood. “Because I put massive tariffs on China, we took in tens of billions of dollars, gave some of it to the farmers… nobody’s ever done that before”.

There’s not much one can say. The deficit was not coming down, and, as ever, China was not (is not and will never be), “paying” for the tariffs. Just like Mexico will never pay for the wall (or for its share of the OPEC+ cuts which Trump agreed to absorb, by the way).

None of that amounts to a partisan assessment. It’s just the truth.

As far as the time table on rebuilding the world’s largest economy from what, in some sense, will be the ground up, Trump mused “it’s not going to be that long” of a process.

And look, folks, he may be right. But it’s worth noting that some of the same economists who are now (accidentally) in agreement with the Oval Office on the likelihood of a V-shaped recovery, also suggested the economy would crash if Trump were elected.

Draw your own conclusions and remember, taking credit for the stock market is a dangerous thing for politicians to do. Live-tweeting the market is a veritable minefield.