September 24, 2019 | One of These Days, Trump’s Tweets Will Fail to Lift Stocks

Trump has been leading the stock market around by the nose for months, but one of these days traders are bound to tire of playing Pavlov’s dog to his tweets. On Tuesday, speaking before the United Nations, the President had an opportunity to score a few points with China ahead of trade talks set to resume in October. All he had to say was that he is that looking forward to striking a deal that would be win-win, and that Xi Jinping wants this as much as he does. Instead, with the eyes of the world on him, he repeated the the well-worn trope that the Chinese are sleazeballs who can’t be trusted. True enough.  But in the make-believe world of diplomacy, telling little white lies — or even big ones if needed — is the key to progress.

Scorched-Earth Politics

Stocks dove as they always do when ostensibly bearish trade news hits the tape. Someone in the Rick’s Picks trading room commented at the time that Trump would probably make nice with a tweet Tuesday evening that would send the S&Ps back up above 3000 overnight.  So far, though, this has yet to happen. Stocks did recoup some of their losses late in the day, however, because of a separate development involving impeachment-crazed Democrats. Their latest excuse for pursuing scorched-earth tactics has focused on Trump’s supposedly withholding aid from Ukraine while he pressed the country to investigate Joe Biden and his son. Trump said he would provide an exculpatory transcript of a key conversation he had with Ukraine’s leader, and that was all traders needed to hear to bounce shares off their lows. This game undoubtedly is starting to wear on investors, and we therefore shouldn’t be surprised if the stock market begins to fall for several days without pause, unresponsive to the President’s most exuberant tweets.

Rick Ackerman September 24th, 2019

Posted In: Rick's Picks

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