(Robert Burgess – Bloomberg)
President Donald Trump likes to equate the rally in stocks since the November 2016 elections with confidence in him and his policies. And yes, the S&P 500 Index has surged 22 percent since then, but a deeper look at equities, bonds and the dollar reveals anything but trust in his stewardship.
Here’s the executive summary: U.S. companies are valued less now than before Trump was elected, despite the run-up in stocks, big corporate tax cuts, reductions in regulations and booming earnings. The cost to borrow for the U.S. has soared relative to other governments, a sign investors are worried about America’s creditworthiness. The dollar’s share of global currency reserves has dropped by the most since 2002.
Investors are losing faith because Trump is turning into the type of president many always feared: unpredictable, volatile and tempestuous. Those characteristics were certainly present last year, but they were largely overlooked as his administration pushed through pro-growth, pro-business initiatives such as tax reform and regulatory cuts. Now, many highly-regarded White House staffers such as former Goldman Sachs President Gary Cohn and cabinet members such as former Exxon Mobil Chief Executive Rex Tillerson have exited and it’s unclear who is left to keep Trump in check on his more radical policies such as those he is pushing through now on trade. Click here to read more.
- Trump’s Trade Confusion (Project Syndicate)
- Trump Rattles Stocks With His Tweets (Bloomberg)
- Donald Trump’s Trade Threats Lack Credibility (Financial Times)