Watching Trump Talk and Stocks Tumble
After a particularly busy few weeks, today provided a bit of a break to end this third full week of March. The bit of respite followed a week in which spring arrived with a Nor'easter that brought us 6+ inches of wet flakes with attendant cold temperatures. Rather bleak for spring.
But then things changed.
After the flakes stopped, no only did the sun burst through the clouds, but we finally felt spring in the air. And it wasn't just wishful thinking. Temps rose a bit more than predicted (although still below average), and combined with a strong sun winter finally began to retreat.
So today just felt a bit lighter. And breaking my usual ban on watching or listening to politicians speaking live, a late lunch found me tuned into our President' opining on why he signed the astoundingly large ($1.3 trillion) budget bill passed by Congress. (This was right after he said he was going to veto it.) In the course of his prepared remarks, we heard a repeated series of criticisms of the Democrat party and those parts of the budget which Mr. Trump considered absurdly bloated. (See our last post for more on "bloat.") So why did he sign, after threatening to veto. It seems that in the course of negotiating the bill's components, defense gets the largest chunk its ever gotten. So Trump decided to sign so he could get his hands on the $400 billion + that will allow a continued strong military build-up. The result will be that our military, already the most powerful in the world, to be even more powerful - thus reversing a downsizing and weakening under the Obama administration...or something like that. We could go on, but let's skip the other details. It was the big bucks for the military that ruled the day.
All this followed a day in which the appointment of John Bolton as #1 national security guy replacing General McMaster got the media all a-flutter. The lefties think Bolton's a war monger; the righties see someone whose hawkish, decisive and - without using the words - a war monger, which it their book is a good thing, I guess. So the military budget increase being the biggest in history (according to Trump), the signing seems to be consistent with the Bolton appointment.
(How in heck did I get into anything vaguely approaching a political analysis? I usually defer to a good friend on these matters. At least he sounds like he knows what he's talking about.)
In any case, somehow, in the course of the speech, the President mentioned the stock market: It's been great since he was elected. Not long after that, stocks tanked right into the close - a strong sell-off to end the week. Close enough to mark the long-awaited test of the February lows? Well, close, but we'll have to see if there's further pressure next week, given the strong sell-off at the end of the week.
As is usually the case, when the Dow plummetted over 700 points yesterday - to great fanfare - the "experts" announced it was due to a fear of a trade war, after the U.S. announced specific tariffs and China barked back with its own. Was today's 424 point Dow drop a continuation of that fear of a trade war? Was it a negative reaction to Trump appointing Bolton. Or was it the astonishing size of the budget that gave traders the jitters? How come, if there's support for a stronger military there wasn't a rally, especially after a heavy sell-off the day before? Are the "voters" in the stock signalling disapproval of Trump, after their initial euphoria after his election?
Let the speculation begin!
For an alternate view, let's just say that the market was looking to retest the February lows. And the threat of trade war, the military build-up, the appointment of Bolton, and the humungous and fiscally irresponsible budget all presented excuses to go about the business of selling and re-testing.
Going into the weekend, the latter explanation suits me fine. And with that in hand, it's time to build today's little mini-break into a full-fledged weekend off from most of the nitty-gritty of markets. For many, it all starts as the clanging of the closing bell at 4 turns into the clink of that Friday cocktail at 5. And, you know what, we're right smack dab in the middle of that no-man's-land between 4 and 5.
Enjoy the weekend!
But then things changed.
After the flakes stopped, no only did the sun burst through the clouds, but we finally felt spring in the air. And it wasn't just wishful thinking. Temps rose a bit more than predicted (although still below average), and combined with a strong sun winter finally began to retreat.
So today just felt a bit lighter. And breaking my usual ban on watching or listening to politicians speaking live, a late lunch found me tuned into our President' opining on why he signed the astoundingly large ($1.3 trillion) budget bill passed by Congress. (This was right after he said he was going to veto it.) In the course of his prepared remarks, we heard a repeated series of criticisms of the Democrat party and those parts of the budget which Mr. Trump considered absurdly bloated. (See our last post for more on "bloat.") So why did he sign, after threatening to veto. It seems that in the course of negotiating the bill's components, defense gets the largest chunk its ever gotten. So Trump decided to sign so he could get his hands on the $400 billion + that will allow a continued strong military build-up. The result will be that our military, already the most powerful in the world, to be even more powerful - thus reversing a downsizing and weakening under the Obama administration...or something like that. We could go on, but let's skip the other details. It was the big bucks for the military that ruled the day.
All this followed a day in which the appointment of John Bolton as #1 national security guy replacing General McMaster got the media all a-flutter. The lefties think Bolton's a war monger; the righties see someone whose hawkish, decisive and - without using the words - a war monger, which it their book is a good thing, I guess. So the military budget increase being the biggest in history (according to Trump), the signing seems to be consistent with the Bolton appointment.
(How in heck did I get into anything vaguely approaching a political analysis? I usually defer to a good friend on these matters. At least he sounds like he knows what he's talking about.)
In any case, somehow, in the course of the speech, the President mentioned the stock market: It's been great since he was elected. Not long after that, stocks tanked right into the close - a strong sell-off to end the week. Close enough to mark the long-awaited test of the February lows? Well, close, but we'll have to see if there's further pressure next week, given the strong sell-off at the end of the week.
As is usually the case, when the Dow plummetted over 700 points yesterday - to great fanfare - the "experts" announced it was due to a fear of a trade war, after the U.S. announced specific tariffs and China barked back with its own. Was today's 424 point Dow drop a continuation of that fear of a trade war? Was it a negative reaction to Trump appointing Bolton. Or was it the astonishing size of the budget that gave traders the jitters? How come, if there's support for a stronger military there wasn't a rally, especially after a heavy sell-off the day before? Are the "voters" in the stock signalling disapproval of Trump, after their initial euphoria after his election?
Let the speculation begin!
For an alternate view, let's just say that the market was looking to retest the February lows. And the threat of trade war, the military build-up, the appointment of Bolton, and the humungous and fiscally irresponsible budget all presented excuses to go about the business of selling and re-testing.
Going into the weekend, the latter explanation suits me fine. And with that in hand, it's time to build today's little mini-break into a full-fledged weekend off from most of the nitty-gritty of markets. For many, it all starts as the clanging of the closing bell at 4 turns into the clink of that Friday cocktail at 5. And, you know what, we're right smack dab in the middle of that no-man's-land between 4 and 5.
Enjoy the weekend!
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