|Up, Up And Away|
What's That Popping Sound?
Our Market-Maker-In-Chief, aka President Donald Trump, is a perfect example of predictability when it comes to assessing the movements of the stock market. When the market goes up, he takes credit. When it goes down, he blames everybody in sight. What he doesn't seem to get is that over the long haul, markets are apolitical. Kiplinger took a look all the way back to 1900 and concluded that "when it comes to your portfolio, it doesn't matter which party wins the White House." Trump's vacillation between taking credit and assessing blame for market moves is politically fruitless, because the market doesn't really give a damn about him and his political fortunes. Focused instead on Trump's policies, the market had a pretty decent run during his first year in office but is now closing out his second year with little fanfare, having given up all of its 2018 gains during the past month or so. Policy hasn't changed much, if at all, but prices are breaking down sharply. Next month they might go right back up.
It may be totally irrational, but as a very bright guy (I think it was John Maynard Keynes) once observed, "markets can remain irrational for far longer than you can remain solvent." Considering the vagaries of Trump's checkered business career, spanning as it has several politically divergent administrations, it's surprising to me that he keeps trying to tie the market's behavior to the ebbs and flows of the political tides. Yesterday he tried to blame the current selloff on Democrats who recently captured the majority in the House of Representatives and their apparent intent to investigate him. I say "nice try" while remembering that the stock market was running up like crazy during the late '90s when President Clinton was not only being investigated, but actually got impeached.
The stock market didn't care then and it doesn't care now. Actually, if Trump were really that concerned about the market's behavior he'd be looking at how his trade and fiscal policies are affecting it, not on the political make-up of the U.S. Congress. Policy, not politics, is where the rubber hits the road on Wall Street.