The new norm: Donald Trump And Stock Market Volatility

The new norm
Editor: Vlad Rothstein | Tactical Investor

The new norm

Many readers wrote in stating that they loved the concept of us posting excerpts to other interesting articles. In keeping with that theme, we think the following post could make for a great read. A wide array of topics is covered as we believe that in today’s world of finance everything is interrelated.  Mass Psychology states that if you centre of attention is on one particular target; it is akin to looking at the tree only and forgetting that it is part of the forest.  Lastly, the media is rife with fake newsin reality, the media pushes nothing but fake news for lies sell more than the truth

Markets can remain overbought or irrational for much longer than most bears can remain solvent – this is a very irrational market. The Fed is supporting it and openly encouraging the corporate world to commit fraud by borrowing large sums of money (on the cheap). These funds are then used to buy back shares to manipulate EPS. It, however, also can push stock prices higher.  Many experts state that this market can’t trade higher much longer, but they have been saying that for over two years and counting. Take a look at the chart below, and while we do not wish this outcome for the Dow, it cannot be ruled out. Irrational Markets and Foolish investors; perfect recipe for disaster

Get Used To The new norm

President Trump, who has taken credit for a rising stock market as a measure of his own success, complained on Twitter Wednesday that “good (great) news” in the economy led to an abrupt decline in stock prices, his first comments about the stock market since its sharp drop earlier this week.

In the early-morning tweet, Mr Trump lamented that in the “old days,” stocks would rise on good economic news, saying “Today, when good news is reported, the Stock Market goes down. Big mistake.” The tweet did not elaborate on what he meant by the “old days” or explain further his analysis of why stocks plummeted on Friday and Monday.

On Tuesday, the Treasury secretary, Steven Mnuchin, tried to walk a fine line in distancing the administration from the recent drop in stock prices while still taking credit for the run of success that preceded it.

“We are very focused on long-term economic growth, and we believe that the policies that we have enacted, including tax reform, are very positive for long-term economic growth,” Mr Mnuchin said at a House Financial Services Committee hearing. Read more

The new norm: Is It True Markets Are Pulling Back On Good News

President Donald Trump on Wednesday broke his silence about the stock market’s recent tumbles and volatility, arguing on Twitter that the decline was a “big mistake” that happened amid a strengthening US economy.

“In the ‘old days,’ when good news was reported, the Stock Market would go up,” Trump said. “Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!”
The Dow Jones industrial average fell nearly 1,200 points on Monday, its largest-ever one-day point drop. Though it was relatively small on a percentage basis, it triggered concern from investors about the market’s stability.
Trump’s silence on the market was notable given how much the president has touted stock surges. An analysis by Business Insider found that Trump typically tweets about the market every 6.5 days. Before Wednesday’s tweet, he had not done so since January 20. Read more

 Weaponized News?

The stock market is making a “big mistake”, Donald Trump said on Thursday, days after a record-breaking sell-off on the US exchanges.

“In the ‘old days,’ when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!” Trump wrote on Twitter in his first public comment on the sell-off.

Since his election, US – and global – stock markets have hit record highs. Trump has consistently pointed to rising stock markets as proof his economic policies are working.

While his corporate tax cuts and push for deregulation have pushed share prices higher, US markets have been on a record-breaking streak for nine years and have risen in large part thanks to economic strength around the world and unprecedentedly low-interest rates. Read more

 

Other Stories of Interest

2018

Is this the end for Bitcoin or is this a buying opportunity? (Jan 24)

Stock Market Insanity Trend is Gathering Momentum   (Jan 10)

Is value investing Dead   (Jan 9)

Irrational markets and Foolish Investor: perfect recipe for disaster   (Jan 5)

Stock market Crash Myths and Realities  (Jan 3)

Bull-Bear Markets & Arrogance   (Jan 1)

2017

Will The Stock Market Crash In 2018  (Dec 11)

Has US Dollar Finally Hit Bottom    (Dec 6)

BitCoin Has Done What Precious Metals Never Could  (Dec 4)

Experts Making Stock Market Crash Forecasts usually know nothing  (Nov 17)

1987 stock market crash anniversary discussions- nothing but rubbish ( Oct 24)