Tag: stock market

Will Trump Ride the Markets to Victory?

The Dow has performed well during Donald Trump’s tenure, but whether it outweighs voter perceptions of the damage from COVID-19 is unclear.

THROUGHOUT HIS presidency, Donald Trump has consistently relied on one measure to gauge his performance: the health of the economy and, more narrowly, the stock market.

And it has worked. Until COVID-19 struck earlier this year, the economy performed well with businesses sanctioning reduced regulations, employment near historic levels and low interest rates encouraging people to buy houses and cars. The economy fell into a deep downturn following the nationwide shutdowns that began in March in response to the pandemic but is recovering, and the stock market continues to soar.

Just how much Trump idolizes the market can be seen in a couple of tweets in February. On the 19th, he tweeted “Highest Stock Market in History, By Far” before doubling down five days later as the first inklings of the enormity of the global threat from COVID-19 became apparent. On Feb. 24, he tweeted that “The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!” It proved to be a great market signal. But only if you were taking the other side of the trade, as stocks went on a volatile ride that ultimately took them into bear territory. Continue reading.

Markets rise as economy struggles; ‘It does not make sense’

The Hill logo

The expression “stock markets are not the economy” may have never been truer.

The S&P 500, an index that tracks the country’s largest publicly traded companies, has all but erased its pandemic losses and closed within a fraction of a percentage point of its all-time high Thursday. 

But far away from Wall Street, the economy on main streets in cities and towns across the country feel as if they are in tatters. Continue reading.

No deal yet on stimulus as stock market teeters on the edge

Supporters mustered only 47 votes of the 60 required to take up measure

Negotiations on an economic stimulus measure that had hit about $1.8 trillion by Sunday — and probably climbing — were set to continue Monday morning, top Senate and White House officials said late Sunday night.

“I think we’re very close. The teams are going to work through the night. We’re going to regroup the principals in the morning,” Treasury Secretary Steven Mnuchin said. “We’re going to work very hard to get this done tomorrow.”

White House legislative affairs director Eric Ueland said administration negotiators would be back up at the Capitol by 9 a.m. to continue talks. Continue reading.

Markets Erase All Gains During Trump Presidency

The Dow Jones Industrial Average slid yet again on Wednesday, erasing all of the gains it had made since Donald Trump took office — as well as a key argument Trump has made for his reelection in November.

When Trump took office, the Dow stood at 19,827 points. On Wednesday, that number was even lower — 19,520 at the time of publication.

That’s down from a high of 29,398 on Feb. 14. Continue reading.

U.S. markets crater as coronavirus, oil prices trigger brief halt in trading

Washington Post logoOil prices dive to the $30s while investors flee for safe havens like U.S. treasuries and gold, amplifying recession fears

The stock markets suffered stunning declines Monday — with the Dow Jones industrial average losing 2014 points — as the threat of a coronavirus-fueled oil war and ongoing panic about the spreading disease grew and triggered a rare forced halt to trading early in the session.

The Dow Jones industrial average cratered 7.8 percent to close at 23,851. The S&P 500, a broader measure of stocks, shed 7.6 percent by the close and the tech-heavy Nasdaq tumbled 7.3 percent.

The New York Stock Exchange tripped the so-called “circuit breaker” at a time of relentless volatility for global markets, which have been battered for weeks as the coronavirus outbreak continues to unfold. The forced 15-minute break initially appeared to have a stabilizing effect, but selling resumed before the end of the regular trading. Continue reading.

The markets are sending a message about coronavirus: The recession risk is real

Washington Post logoThe stock market drop is ugly. But one big threat to the economy is a slew of defaults — both personal and business.

Pick just about any market — stocks, bonds, oil — and it’s sending a signal that investors around the world think there’s a high probability of a recession.

J.P. Morgan sent around a note to clients late last week saying markets were indicating a 90 percent chance of a recession, a term that generally means six straight months of economic contraction. The picture looks worse now, especially in the bond market. Last week, Wall Street panicked when the yield on a marquee government bond — the U.S. 10-year Treasury — fell below 1 percent. That had never happened before. Now that yield is below 0.5 percent, a jaw-dropping situation that didn’t even occur during the Great Recession.

What the heck is going on? The world economy essentially just got a one-two punch to the face. The coronavirus is a serious health crisis that’s morphing into an economic crisis as people stay home, cancel trips and stop spending on about everything except hand sanitizer and toilet paper. On top of that, Saudi Arabia basically launched an oil price war on Sunday. The world has a glut of oil right now and the Saudis decided not to scale back production after Russia flooded the market with extra oil. So oil prices plunged 30 percent Sunday, the largest one-time drop since the 1991 Gulf War. Oil is now trading around $30 a barrel, a price most energy companies outside Saudi Arabia can’t survive on, including many in the United States.

Economist who predicted 2008 crash says coronavirus will send Trump’s 2020 prospects down in flames

AlterNet logoNouriel Roubini, the economist who earned the nickname “Dr. Doom” for his accurate predictions of the 2008 financial crisis, believes that the spread of coronavirus will tank the stock market and cost President Donald Trump the 2020 election.

Per Business Insider, Roubini told German newspaper Der Spiegel that he expects the virus will cause the stock market to drop by as much as 40 percent this year.

When that happens, Trump will lose his top talking point about the purported “greatest economy ever” and his reelection campaign will go down in flames, the economist predicted. What’s more, he said that Trump’s campaign was toast no matter who wins the 2020 Democratic presidential nomination. Continue reading.

What’s the Deal With That Inverted Yield Curve? A Sports Analogy Might Help

New York Times logoA bet by investors that the future will be worse than the present.

The financial world has been atwitter about the inversion of the yield curve. It is a phenomenon in the bond market in which longer-term interest rates fall below shorter-term interest rates, and has historically been a warning sign that a recession could be on the way.

This all seems obvious to people who are steeped in bond market math and the workings of fixed-income markets, and can be completely perplexing to those who are not.

Maybe a sports gambling analogy will make the intuition clearer.

Any adult can walk into a casino and bet on how an N.F.L. team will do this year. For example, bettors once again expect the New England Patriots to be an excellent team — that they are likely to win 11 or 12 out of their 16 games. Casinos will let you wager on how many games they will win this season.

View the complete August 15 article by Neil Irwin on The New York Times website here.

Moving The Market: Trump Tweets, Stock Prices, And Potential Profits

President Donald Trump’s tweets often set off big gyrations in stock prices. Anyone who knows of the tweets in advance could make a fortune, though not legally.

Who knows of the tweets in advance? Trump knows, and there’s growing speculation that he might be showing tweets in the making to select others in his inner circle. Such suspicions have been bubbling since Election Day 2016, when Trump started attacking specific corporations, causing their stock prices to tank. An investor can make money off a falling stock price as well as a rising one.

NBC’s Howard Fineman opened the floodgates on this troubling discussion with a tweet of his own. “My twitter feed is asking a legitimate question: are @realDonaldTrump’s businesses and family profiting from insider knowledge of his pending — market-moving — tweets, comments and bargaining stands?” he asked. “My guess would be yes.”

View the complete June 12 article y From a Harrop on the National Memo website here.

Economic Indicators Trump Cited To Show A Strong Economy Now In Decline

Trump repeatedly cited manufacturing activity, manufacturing confidence, consumer confidence, and the stock market to claim that the economy was the strongest in history. All of those indicators have suffered major recent declines.

THEN: Trump claimed the U.S. was in a “manufacturing renaissance.”

Trump: “We are in the midst of a manufacturing renaissance—something which nobody thought you’d hear—which means more jobs for our great electrical contractors.”

NOW: A key manufacturing index tumbled by the largest amount in a decade.

Bloomberg: “A gauge of U.S. manufacturing plunged last month by the most since October 2008, a fresh sign of deceleration in the economy amid global strains across the sector. U.S. stocks extended declines and Treasury yields fell after the report.  The Institute for Supply Management index dropped to a two-year low of 54.1, missing all estimates in Bloomberg’s survey, data showed Thursday.” Continue reading “Economic Indicators Trump Cited To Show A Strong Economy Now In Decline”