Trump’s tariffs against Mexico caused another in a series of stock market meltdowns last Friday.  And the overnight markets were predicting a sharply lower market today.  But the markets are reacting to more than the latest Trump bullying tactic.  They are finally catching on that Trump and his coterie of feckless economic advisers (like Mnuchin and Kudlow) are not just erratic and unpredictable, but also lacking in any long-term policy or strategy.  Trump just reacts to cable TV headlines and slaps tariffs on any country he wants to bully.

The markets are also starting to focus on the long term effects of Trump’s disastrous tariffs and his only-for-the-rich Tax Scam in light of a business cycle that has been going gangbusters for ten years and is finally starting to look weak.  The 2019 first quarter GDP came in at a robust 3.1% and all of the Trumpers were gloating about the “incredible” economy that Trump had wrought.  But it’s looking like that quarter will be the high-water mark of his administration.  JP Morgan just downgraded their second quarter GDP forecast from 2.25% to 1%, and Morgan Stanley dropped their GDP forecast from 1% to a measly .6% in the second quarter.  These are disastrous numbers for Trump, especially if they are becoming the new normal, which is what the bond market has been signalling recently.

The forecasts are dropping, in part, because some of the long-term economic indicators are turning south.  The latest durable goods and retail sales numbers were both bad, there’s been a “notable slowdown” in the retail services sector, and manufacturing activity fell to a nine year low in May.  These numbers don’t bode well for this year’s economy.  Here’s a deeper dive from Bloomberg:

What is bad news for the markets and the economy is bad news for Trump.  The one thing he’s been able to point to with pride for the length of his tenure has been the robust economy (that he inherited from Obama).  But the economy could be running out of steam, hurt in part by Trump’s tariffs, higher gas prices, and higher health care and insurance costs caused by the destruction of the ACA framework by Trump.

What is bad news for the markets and Trump is good news for the Democrats.  To face Trump in an election year with a strong economy would have been difficult.  But to face Trump during a slowdown, especially of his own making, will take away the one giant talking point that Mister Phony Businessman has always clung to when all else failed.

Keep your eye on the stock market.  This may be a good time to sell stocks and sit on the sidelines.  But it may also be a good time for Democrats to point out how abysmal Trump’s record has been on the economy.

Keep resisting and keep working to “vote his ass out of office.”


Markets finally seeing how damaging the Trump presidency & tariffs will be to our economy.  The mkts have been giving him a pass, unemp is low, etc.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s