Posted by OHG on April 02, 2018 at 14:00:35:
In Reply to: Book: Did Trump cause the stock market downturn? posted by ID1 on February 12, 2018 at 12:24:30:
: The market is always nervous about what Trump will do next, but there are always other causes for a pullback, such as interest rates and economic policy.
: In this case, the two are related. The market is worried that the economy will overheat, causing interest rates to move quickly upward (if you can make guaranteed money by buying CDs, why risk it in the market in uncertain times?).
: The market is also worried that the Republican tax bill that channeled money to the rich and to the largest corporations was ill timed, pumping more money into an already overheating economy resulting in a likely increase in interest rates. The market responded by dropping 10%, with two 1000-point drops in one week.
Just watch the DOW and the S&P charts. You will see the sudden drops in those markets perfectly coincide with Trump's off-kilter comments. Investors no long care about earnings or interest rates, they are worried about what Trump will do next.