Trumps actions and rate cuts did nothing for the DOW. However…

A Congressional spending deal of $8.5 billion for coronavirus plus Biden’s surge as a candidate brought the investors around today.

https://www.investors.com/market-trend/stock-market-today/dow-jones-surges-500-points-stock-market-rallies-biden-bounce/

Now just a quick take would make Trump a bit nervous. Wall Street seems more optimistic about the Democrat candidate being a moderate than the regime’s handling of this crisis.

Is Trump irrelevant when crunch time comes?

Kind of interesting I think.

22 thoughts on “Trumps actions and rate cuts did nothing for the DOW. However…

  1. What’s going on in the market right now is hard to attribute to anything government does.

    Much of the market is owned by insurance and pension investors, and their trading, as well as others, tends to be guided by algorithms that don’t really bear on their underlying value if the corporations. Institutions trade securities without any real knowledge of the companies they represent based on so-called fundamentals.

    Thus the market has become dynamically unstable, one preturbed it will swing back and forth wildly before settling back to normal values based on anticipated future profits.

    Politicians should avoid taking credit or assigning blame as the market will turn on them tomorrow.

    As an individual investor, you do best by having a diverse portfolio and not taking notice day to day.

    I am reminded of my flight instructor’s advice on engine failures at night.

    Pick what looks like an open field near a road and descend toward your chosen landing site at the lowest controllable airspeed. When you’re about 200 feet above the ground, turn on your landing lights. If you see trees, turn the lights back off.

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    1. @Tabor

      “What’s going on in the market right now is hard to attribute to anything government does.”

      For the record, that is a very different tune from the one you were singing when Trump’s only claim to fame was a rising stock market. In fact, you explicitly explained the market transition from being an “unsustainable bubble” when Obama was President to being a reflection of a new and wonderful economic reality shaped by the Presidential wisdom of Donald Trump. Same market in both cases. Same investors. Same algorithms.

      Your engine failure story was funny, though.

      Liked by 1 person

      1. My comments refer to the recent wild fluctuations, not the overall upward trend.

        The increased profitability resulting form lowered corporate taxes and less hostile regulatory processes is real and reflected in the overall upward trend.

        But the so-called ‘fundamentals’ based algorithm driven fluctuations are artificial and result from professional investors trying to anticipate the market and should be ignored.

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          1. As Mark Twain warned, there are three kinds of lies by increasing perfidy. lies, damned lies, and statistics.

            First, the stock market is forward looking. The market took off after being relatively flat for 2 years as soon as Trump was elected and we knew Hillary would not be in control.

            https://finance.yahoo.com/quote/%5EDJI/chart/#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%3D%3D

            Note also that much of the gain during Obama’s term was simply recovery from the Housing Bubble Collapse. (same chart) In fact it took his entire first term, the slowest recovery in history.

            When you get on a boat at low tide, it does not rise due to your seamanship.

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          2. “When you get on a boat at low tide, it does not rise due to your seamanship.“

            But when you board a boat during a rising tide it’s perfectly acceptable to take credit for the rise?

            Liked by 1 person

        1. Per your link, from September 2018 to October 2019 the market lost 1000 points at respective closings. That is less than flat. And after the sugar high of tax cuts to boot.

          The fact is that Trump inherited a growing economy with record months of employment gains. Both employment and GDP growth has not been any better, even worse actually.

          Tariffs and virus crisis are the main issues. We haven’t gained a thing with the trade wars other than some crumbs with NAFTA. And now with China reeling from coronavirus, we are not going to see much return on Trump’s battle with Xi. Unforeseen, perhaps, but on the other hand, good strategic planning can be more prepared for inevitable events that always pop up. Gut instinct is not good enough at the graduate level.

          And when Trump fired everyone with a brain or experience…let’s just say our defenses were compromised.

          The fact is also that no one knows if anyone could have done better than Obama. Opinions, theory, speculation and arm chair quarterbacking are all just exactly that.

          Most experts today are a bit disappointed that we did not come down much harder on the crooks in finance. Prison time for a few dozen top level folks would have been very just.

          When your house is on fire, extinguishing the flames takes precedence over water damage.

          Liked by 1 person

          1. Yes, there were some serious frauds being perpetrated by them. Their bonuses were determined by volumes of loans and I believe they lied to Congress.

            But that does not absolve by any means the outright fraud of ratings agencies that knew full well the investments were worthless. Or banks like Goldman Sachs that sold that crap to clients with all the assurances, then bought short. Or the guys that sold “virtual” insurance against investments that AIG handled.

            They were all in this together making billions knowing that it was all a scam.

            I dint care if the “police” (Freddie and Fannie) were buying stolen goods, the burglars (brokers) were still thieves.

            Liked by 1 person

          2. By the way, just as a small reminder: Fannie and Freddie paid back their bailout money PLUS interest. Not sayin’ the leaders are saints, but the money was returned to the Treasury. Just sayin’

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        2. @Tabor
          LOL!

          The bubble you described and that Trumped pumped up with massive deficit spending and corporate giveaways bursts on Trump’s watch but THAT doesn’t count. Only the days that the market goes up are his doing. It seems that today is not one of those days with DJI down 1000+

          Liked by 1 person

      2. @Murphy

        Yeah, kinda made me think of that old movie “Sybil”..

        Regardless, here’s my take on the FED’s action: since they are well aware that a supply-side crisis (what’s driving this Market reaction) will not be effected by cheaper money, they made the cut now so trump can’t blame them for the downturn later.

        I think they’re THAT pissed off….Tick, Tick, Tick..

        Liked by 1 person

  2. Presidents have little control over the economy or Wall Street. Yes, the tax cut gave a temporary boost, but manufacturing is down again. The big investments didn’t materialize. Never mind the trade war.

    Trump has tied himself to the DOW more than any other president. That’s why he demands interest rate cuts all the time.

    Didn’t work now and just emptied the “toolbox” for when really needed.

    I just thought the irony of the “Biden Bounce” was too much to pass up.

    Liked by 3 people

  3. After years and years of listening to “advise”, I have learned that investor opinions are like a$%holes, everybody has one. I’m sure it would be very easy to find someone who thinks otherwise. Ask Cramer what he thinks or Carlsen or anybody? Bet you get a different answer from each one and where you should put your money now.

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    1. …”opinions are like a$%holes, everybody has one” Well, not everyone.

      And the majority of the news pieces across ALL sides of the news spectrum attributed the uptick to Biden’s success and the emergency spending deal. (Which, by the way, is closer to Schumer’s recommendation than Trump’s.)

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  4. Here’s a thought, if there is such a thing as a Biden bump, perhaps it is more of a rebuke to all out extremist socialists than Trump? You know, unfettered Democrat warfare against one of their own, Bernie, appears to be working?

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    1. There are more than a few Trump voters who would be happy to get him out if the Democrats would give them some reason. These are not liberals, but rather moderate conservatives who would compromise on a moderate Democrat.

      We’ll see. I am sure we are going to see one of the nastiest and most expensive campaigns in history. And there have been some nasty ones in our history, starting with Jefferson-Adams.

      Liked by 1 person

      1. @len

        Yes, the Independents and moderate (real) Conservatives will be key to ridding the WH of the current infestation. Their voting for Bernie is problematic.

        PS; my other comment was directed at Bob’s word salad…

        Liked by 1 person

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