U.S. stock market cheerleader-in-chief goes quiet in downturn
Investors have long toasted the U.S. stock market boom that emerged from the depths of the 2008 financial crisis, but one of the bull market`s most vocal and visible cheerleaders has abruptly fallen silent: the U.S. President.
Since his inauguration in January last year, Donald Trump has regularly taken to Twitter to proclaim the gains in U.S. stocks, often appearing to take credit for their rise.
Following his surprise victory in November 2016, investors make a beeline for the market in what became known as the `Trumpflation` trade - a bet that the former real estate mogul`s administration would deliver a boost to the U.S. economy through increased fiscal spending, deregulation and tax cuts.
As the following graphic shows, the frequency of Trump`s tweets touting the stock market upswing increased towards the second half of 2017 as the S&P 500, a broad index of U.S. stock prices, hit a series of record highs. The index ended the year up nearly 20 percent, its best annual performance since 2012.But after a violent selloff - prompted by fears of U.S. inflation - wiped over $4 trillion in global stock market capitalization earlier this year, the president`s Twitter feed has gone quiet on the subject: the second-longest spell without a tweet about the market since his election.
Trump`s last tweet on the market came shortly after the shakeout, warning investors they were making a "big mistake" for selling stocks despite "good news" about the economy. The S&P 500 and global stocks have struggled to recover since the rout in early February.
That development, investors say, is due to fears of a global trade war erupting on the back of tariffs and talk of further protectionist measures from the U.S. administration. Trump himself has tweeted, saying trade wars are "good", and "easy to win."
"For a person who`s been obsessed with stock market gains since his election victory 16 months ago, Trump doesn`t appear too concerned about the impact his tariffs are having at the moment," wrote Craig Erlam, market analyst at OANDA, in a note to clients.
The added factor of the successive departures of Trump`s chief economic adviser Gary Cohn and Secretary of State Rex Tillerson is causing investors to consider whether there has been a definitive turn in the U.S. administration`s priorities. Cohn and Tillerson were widely viewed as moderates on issues of trade and foreign policy.
Graphic - Touting the stock market: https://reut.rs/2pEUUwa
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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