Saturday, 21 July, 2018

Trump discovers that markets go down

Trump discovers that markets go down Trump discovers that markets go down
Stacy Diaz | 06 February, 2018, 16:02

While there could be various factors behind the market's volatile plunge the last several trading days, Trump has frequently credited himself for the market going up, seemingly with little regard for the fact that it can also move in the other direction.

A trader works on the floor following the closing bell as a screen shows the Dow Jones Industrial Average on the New York Stock Exchange on Monday.

As the stock market soared following his election, President Trump was eager to take credit, often using Twitter to proclaim victory each time the Dow Jones Industrial Average crossed a new barrier.

With stock markets declining again, the White House on Monday said the fundamentals of the USA economy are "strong".

White House spokeswoman Sarah Sanders cited "strengthening USA economic growth, historically low unemployment and increasing wages for American workers".

Throughout a speech at a factory in Blue Ash, Ohio, Trump made no mention of stock markets, departing sharply from past practice.

"We're saluting one great American flag and everybody stood up yesterday, there was nobody kneeling at the beginning of the Super Bowl", Trump said.

The slump began on Friday as investors anxious that creeping signs of higher inflation and interest rates could derail the US economy along with the market's record-setting rally.

CNN's Jeff Zeleny noted that a White House aide found it "jarring" that Fox News pulled away from Trump's speech to cover the crash. The current conventional market wisdom is that the fundamentals of the economy and corporate profits, a key driver of valuations, are likely to remain solid, as is this rare period of synchronized global growth.

"When I signed the tax cut, six weeks ago, it set off a tidal wave of good news that continues to grow every single day". And he didn't allow the stock market slide to dampen his remarks.

The Dow Jones Industrial Average saw its steepest ever one-day point drop, wiping 4.6% off the value of America's 30 largest companies to finish at 24,345.75, having at one point plummeted almost 1,600 points to a low of 23,923.88.

Monday's losses, which deepened a decline begun on Friday, erased the 2018 gains for both the Dow and S&P 500, which were bolstered by euphoria over the passage of Trump's tax cut legislation at the end of 2017. In November 2012, Trump tweeted, "The stock market and US dollar are both plunging today".

"Wait until you see GDP over the next year or two".

Doug Holtz-Eakin, president of the American Action Forum and a former economic adviser to 2008 Republican presidential nominee John McCain, said, "The president shouldn't comment about the stock market".