Whatever happens on jobs Friday and thereafter, the price action on Wall Street this week amid Donald Trump’s tariff flip-flopping was ominous: Market participants are unnerved enough by the perception of chaos that they were unmoved by the administration’s abrupt decision Thursday to yet again delay the imposition of import taxes on Canada and Mexico.
Typically, Trump can engineer a recovery in risk sentiment simply by announcing tariff reprieves or otherwise dialing down his adversarial rhetoric and thereby the temperature. On Thursday, it didn’t work. That’s notable irrespective of subsequent developments.
A news-based measure of trade uncertainty jumped off the charts recently, and what does the market hate worse than anything else? Uncertainty.
Far from calming frayed nerves, Trump’s tariff reversal on Thursday appeared to make things worse by validating critics’ contention that in fact, there’s no plan. That Trump’s simply making it up as he goes along.
The seeming incongruity between the decision to postpone levies on goods and Scott Bessent’s message, at an event in New York, that cheap goods were never part of the American dream in the first place, probably didn’t help.
With that in mind, note that retail investor sentiment in the weekly AAII survey was quite poor for a second week.
Although bearish sentiment receded a bit, at 57.1%, it’s still very elevated. Indeed, as the figure above shows, it’s 26ppt above its long-term average, and has only spent two of the last 14 weeks below the historical mean.
I hear a lot of excuses from right-wingers and people who’re too smart for their own good sense.
Excuses like this one: “Well, if you look at how GDP’s calculated, and you conjure up an excuse to wave away what’s pushing current-quarter growth tracking lower, the number looks a lot better.”
And excuses like this: “Trump actually wants lower stocks. That’s his gift to Main Street because if there’s a bear market, 10-year yields will go lower and the Fed will be forced to cut rates, which in turn will let Sam and Susie buy that starter home they’ve always wanted.”
And on and on. I don’t know about anybody else, but that stuff sounds like a lot of bullsh-t to me. And even where it isn’t strictly bullsh-t, it has a bullsh-t-ish air to it.
But hey, let’s have a laugh. Because we all know what this is, don’t we? Right-wing market blogs, contrarians of different shapes and sizes as well as Wall Streeters who voted for Trump because they want lower taxes and couldn’t stomach the idea of a black woman in the Oval Office, are going to spend the next four years making increasingly absurd excuses for this administration. At least until Howard Lutnick saves them the trouble by remaking the BEA in the image of China’s National Bureau of Statistics.
Of course, “Mr. Market” won’t buy the bullsh-t any more than “he” bought Liz Truss’s bullsh-t, even if a lot of individual market participants eat it up. So, if Trump wants a sturdy stock market, he’ll need to stop acting crazy. Or, failing that, he’ll need help from the Fed.
People might be waking up to the dissolution of our nation at all levels. Trump may not have a plan but he has said what he wanted to do and is doing it, God help us. He acts like he is following a plan (someone else’s) and gets really upset when it doesn’t go smoothly, as if he is afraid. Seems more like watching a gangster movie than watching the disfunction of our government in the last years.
Now Trump is blaming the “globalists” for the market tanking and complaining about everyone taking advantage of us. We need to start issuing bingo cards with Biden, Globalists, Mexico, Canada, China, Communists, Europe, Ukraine, Muslims, transgender people, bureaucrats, electric cars, windmills, and the many other people, places, and things that get blamed for our sad state of affairs.
Once I started listing things out, I was honestly a bit shocked at how many different targets Trump has and I put less than a minute of thought into it. I’m guessing you could add another hundred grievances to that list if you did some research on Trump’s truth feed.
Can’t believe it didn’t come to me the first time around, but who could forget his beef with LED light bulbs?
Sociopaths have a distinct pattern; unwavering desire for personal gain or glory, make overt/blunt moves to achieve, blame others or the victim(s) for the results. Meanwhile the zeitgeist amongst disenfranchised is to celebrate the ‘triggering pattern’ and claim personal victory, aka ‘he got his at their expense and I LOVE IT’. Unfortunately the only way to deal with a sociopath is to not engage with them at any level.. call BS and move on. So here we are, at a global level, trapped in a toxic relationship with our own neighbors cheering it on as they watch with glee from their front yard.