Market Landscape Changes Daily in World of Trump Tweets

It has often been said that President Donald Trump thrives in chaotic situations.

In fact, those who have followed Trump closely over the course of his career say that he purposely manufactures chaos in order to reach his goals. While his opponents are caught flat-footed by the chaos, they say, Trump will be working to find solutions to the turmoil that was of his own creation.

If this is the case, President Trump is doing a fine job of creating turmoil in this current market environment, which has led many traders to pull out their hair. Market timers have to have one of the worst jobs in the world right now, as things change daily based upon what President Trump decides to Tweet.

Consider the current market environment. The bond market is screaming that the US economy is weakening, though President Trump and his team continue to assert that the economy is strong and resilient.

One day, President Trump will claim that a breakthrough with China on trade is close, and the next day he will be threatening new tariffs against China on Twitter.

Tune in to a Trump speech and he'll be imploring the Federal Reserve to drop the interest rate by a full percentage point, which would be rare and almost unprecedented.

It's a common occurrence these days when the market opens one way and then closely sharply in the other direction, usually due to something that President Trump has said. The market will tank on a new round of tariffs and soar when Trump says that he is pushing for lower interest rates.

This is the playing field that President Trump has created, and it will likely result in the premature aging of many traders across the world. You don't even necessarily need to be trying to time the market - maybe you are putting some fresh money to use as part of a dollar cost averaging plan, only to watch your new money quickly fall 5-10% in value.

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If you consider that Trump tries to manufacture chaos so that he can solve his own problems, you can likely also assume that some sort of resolution to the ongoing China/US trade issue will fall into place before the 2020 election. That is, of course, if China decides to play ball - if they believe that Trump is vulnerable in 2020, China may decide to wait things out to see if they can get a more amiable negotiating partner.

One thing is for sure - we are living in compelling times, and you can't help but wonder what might be next.

Filed under: General Knowledge