Trump's Election and the Markets

[Russ Smith]

Yuge down day in the markets today, don't even want to look at my own holdings.

Nasdaq down 4.43%, S&P 3.09, DOW 2.41%.

The NASDAQ one is a direct response to tariffs and Trump saying yesterday they would continue. One stock I sold out of months ago, I ROBOT(IRBT) went down over 12% today despite great earnings because in their call they mentioned the problems they are having with the Tariffs.

If my math is right, both the DOW and the NASDAQ are now negative for 2018. Nasdaq is off 12.5% from its recent high now and that's all in the month of Oct.

 

[Russ Smith]

Yahoo says Nasdaq is still up 1% on the year so I guess I picked the wrong start price for 2018. DOW and S&P are now both negative.

 

[Russ Smith]

Certainly didn't sell at the peak but I closed out all my stocks in Etrade yesterday on the big up day and boy am I glad with how badly they are all down today. THey were almost all tech stocks and growth or very volatile stocks and I decided in the current market environment they were now too risky to be in. I did very well with them the last 1-2 years but I took my profits off the table. Also with my relocation, then relocating back and missing work due to my knee surgery, i decided this was the good year to take those profits. I'll have less than half a year of job income so I will way overpay on my taxes there so some of that will offset the profits I took selling the stocks.

I'm going to temporarily put them in an Etrade savings at 1.9% while I figure out which stocks I think are safe enough to buy. I think tech is still VERY dangerous right now I think the tariffs are starting to hit tech in lots of ways, and the honeymoon on the tax bill savings is over now so earnings going forward might be worse. With Google and Amazon warning just that, I expect we're going to see Nasdaq go down even further.

I still love all those companies I sold, but I will love them more when I buy them back once things have stabilized. Honestly when that is IMO depends quite a bit on the elections. if the Dems take control I think it might put much more pressure on Trump to wind the stupid trade war down quicker.

 

[Russ Smith]

Last 12 months the Nasdaq is up about 5%, the Dow 2.8 and the S&P 2.3.

Still beats CD's over those same 12 months but not by a whole lot.

Sure am glad the orange dictator started that trade war and broke the markets.

 

[Russ Smith]

Just waiting for Trump to blame yesterday and today on Pence. I don't think it was an accident Pence was the one over the weekend talking up the tariffs and more to come. I think Trump wants to test his loyalty so he told Pence you take the blame this time, you say it not me. And after a huge selloff yesterday we're way down again today, NAS is down over 5% the last 2 days, just pummeling everyone's investments right now if I'm not mistake all 3 indexes are now down for the year despite the huge tax giveaway to corporations, in large part due to tariffs. Now interest rates are climbing and Trump doesn't have a clue what to do so he's blaming the fed.

My guess is Pence is next to get blamed

 

[elindholm]

My guess is Pence is next to get blamed

That's hilarious, because the last Vice President to have any impact at all on the economy was ... no one.

 

[AZCB34]

Markets great-all Trump
Markets bad-pick scapegoat

I don't think I use the hate very often but I find it entering my mind more and more with regards to Trump.

 

[Cardsfanstl]

Part of the reason the markets are going down is 1) interest rates rising costing businesses more money to run operations 2) the GOP tax cut is not having the desired effects of job creation and capital investment the proponents thought. Remember that video where before the tax cut was passed they asked a roomful of CEOS if they would reinvest their tax cuts in their company by creating more jobs. Only a handful said they would 3) no plan for infrastructure in the near future. Infrastructure would be a boom for job creation and capital investment across the country but it costs money but that money would be offset by workers paying taxes and spending more money.

 

[82CardsGrad]

Part of the reason the markets are going down is 1) interest rates rising costing businesses more money to run operations 2) the GOP tax cut is not having the desired effects of job creation and capital investment the proponents thought. Remember that video where before the tax cut was passed they asked a roomful of CEOS if they would reinvest their tax cuts in their company by creating more jobs. Only a handful said they would 3) no plan for infrastructure in the near future. Infrastructure would be a boom for job creation and capital investment across the country but it costs money but that money would be offset by workers paying taxes and spending more money.

Jobs aren't an issue at all... though, you are 100% correct that the tax cuts did not produce any meaningful CapEx spending on the part of corporations.
Interest rate hikes have been, and will continue to be a drag on stocks. But make no mistake, Trump himself and all his whacky/illogical behaviors, coupled with his ongoing Tariff rants, are the main culprit.

All that said - I read a very intersting article from Goldman Sachs yesterday, where they're predicting anemic GDP growth in 2019, even below 2% in the 3rd and 4th quarters! I think that would send Trump officially into a rubber room!

 

[Cardsfanstl]

Jobs aren't an issue at all... though, you are 100% correct that the tax cuts did not produce any meaningful CapEx spending on the part of corporations.
Interest rate hikes have been, and will continue to be a drag on stocks. But make no mistake, Trump himself and all his whacky/illogical behaviors, coupled with his ongoing Tariff rants, are the main culprit.

All that said - I read a very intersting article from Goldman Sachs yesterday, where they're predicting anemic GDP growth in 2019, even below 2% in the 3rd and 4th quarters! I think that would send Trump officially into a rubber room!

That will send him into a tizzy. Jobs may not be an issue at this moment but I believe they will be in the next couple of years due to trade wars, debt spending, and lack of an educated labor force. If this market downturn continues and the deficit continues to rise it will be a major drag on the economy especially if the GOP and or Trump default on the national debt.

Personally I feel they are creating the same mistakes they did before 2008 when the housing market went into free fall. They removed a lot of the barriers put into place to protect individuals from predatory lenders. Add that to the student loan debt crisis and I see some major problems facing this country and world.

 

[82CardsGrad]

That will send him into a tizzy. Jobs may not be an issue at this moment but I believe they will be in the next couple of years due to trade wars, debt spending, and lack of an educated labor force. If this market downturn continues and the deficit continues to rise it will be a major drag on the economy especially if the GOP and or Trump default on the national debt.

Personally I feel they are creating the same mistakes they did before 2008 when the housing market went into free fall. They removed a lot of the barriers put into place to protect individuals from predatory lenders. Add that to the student loan debt crisis and I see some major problems facing this country and world.

Completely agree... lending is absolutely an issue, but will only surface as such once the real estate market goes into correction/recession - which is inevitable as the current valuations are entirely unsustainable.
Our leaders all resort to "tricks" to force growth and produce economic figures they believe to be conducive to their well-being. The tax-cuts were a perfect example... Entirely not needed. Did nothing in terms of real value to the economy. But only solidified Trump's position within his Trumpville base.

 

[Cardsfanstl]

Completely agree... lending is absolutely an issue, but will only surface as such once the real estate market goes into correction/recession - which is inevitable as the current valuations are entirely unsustainable.
Our leaders all resort to "tricks" to force growth and produce economic figures they believe to be conducive to their well-being. The tax-cuts were a perfect example... Entirely not needed. Did nothing in terms of real value to the economy. But only solidified Trump's position within his Trumpville base.

I am for lowering taxes for corporations and individuals as long as the loopholes are reduced also.

I am a seasonal tax preparer from January to April each year. 10 years doing it. Money I make is my Cardinal away games football trip money. I know of no person or business paying exactly the tax rate they should be paying due to loopholes. The 35% tax corporate tax rate was just a number. Most corporations pay around 21% with all the loopholes. In fact Walgreens was paying around 20%. But the Congress in their infinite wisdom did not get rid of most loopholes so now corporations are paying around 10% which is a lower percentage than most individuals pay. Why should person like myself have to pay a larger % share of my income (under 100K) to taxes while a corporation pays less of a % and they have billions of dollars of revenue.

Makes no sense to me.

Plus these new tax laws for Sole proprietorships, partnerships and S corps are so confusing I feel a lot of people are going to be receiving letters from the IRS stating their deductions are incorrect and they are going to owe more money.

 

[82CardsGrad]

Why should person like myself have to pay a larger % share of my income (under 100K) to taxes while a corporation pays less of a % and they have billions of dollars of revenue.

Amazing isn't it... but then again, you and me don't offer the power and the potential to support a candidate and/or party, the way corporations do. We also don't have high-paid lobbyists representing us, while slipping millions into the political system.
Ugh...

 

[Russ Smith]

Part of the reason the markets are going down is 1) interest rates rising costing businesses more money to run operations 2) the GOP tax cut is not having the desired effects of job creation and capital investment the proponents thought. Remember that video where before the tax cut was passed they asked a roomful of CEOS if they would reinvest their tax cuts in their company by creating more jobs. Only a handful said they would 3) no plan for infrastructure in the near future. Infrastructure would be a boom for job creation and capital investment across the country but it costs money but that money would be offset by workers paying taxes and spending more money.

So you're saying they lied to us?

The whole thing is maddening, if he would have just stood on the sideline and kept bragging he was making the markets go up they would be much higher. He still could have given his rich buddies a tax break , we'd still have interest rates going up but without the stupid trade war things would be much better.

All they have to do now is mention the word tariff and the markets tank

 

[Russ Smith]

That will send him into a tizzy. Jobs may not be an issue at this moment but I believe they will be in the next couple of years due to trade wars, debt spending, and lack of an educated labor force. If this market downturn continues and the deficit continues to rise it will be a major drag on the economy especially if the GOP and or Trump default on the national debt.

Personally I feel they are creating the same mistakes they did before 2008 when the housing market went into free fall. They removed a lot of the barriers put into place to protect individuals from predatory lenders. Add that to the student loan debt crisis and I see some major problems facing this country and world.

Nailed it.

 

[AZCB34]

Part of the reason the markets are going down is 1) interest rates rising costing businesses more money to run operations 2) the GOP tax cut is not having the desired effects of job creation and capital investment the proponents thought. Remember that video where before the tax cut was passed they asked a roomful of CEOS if they would reinvest their tax cuts in their company by creating more jobs. Only a handful said they would 3) no plan for infrastructure in the near future. Infrastructure would be a boom for job creation and capital investment across the country but it costs money but that money would be offset by workers paying taxes and spending more money.

I would add to this that the markets were simply overheated as well and "due" for a correction of some sort. Your points hastened the drop and they are causing the drop to feel mite unorganized and violent.

In every presidential cycle, year three (after midterms) has historically been the best market year regarding returns. Guess we will see if that holds true. I don't think the indicators are there.

 

[82CardsGrad]

One of many growing warning signs that 2019 could be an ugly year...

US durable goods orders fall 4.4% in October https://www.cnbc.com/2018/11/21/us-durable-goods-orders-oct-2018.html

 

[Russ Smith]

I would add to this that the markets were simply overheated as well and "due" for a correction of some sort. Your points hastened the drop and they are causing the drop to feel mite unorganized and violent.

In every presidential cycle, year three (after midterms) has historically been the best market year regarding returns. Guess we will see if that holds true. I don't think the indicators are there.

Oh absolutely there was goign to be a correction it was when not if, but it's been much more chaotic because of Trump.

The Dow is 11% off the high, Nasdaq I think 15% off the high. That's a correction but this time it doesn't feel like a "controlled" correction except that it's being controlled by the Yahoo in chief and his twitter account.

I think today's bounce is largely pre Thanksgiving optimism it "must be the bottom" I suspect we're still going down a bit more from here. In the long run it will be healthy and we'll move back up unless Trump just does something else stupid, which he probably will.

 

[AZCB34]

Oh absolutely there was goign to be a correction it was when not if, but it's been much more chaotic because of Trump.

The Dow is 11% off the high, Nasdaq I think 15% off the high. That's a correction but this time it doesn't feel like a "controlled" correction except that it's being controlled by the Yahoo in chief and his twitter account.

I think today's bounce is largely pre Thanksgiving optimism it "must be the bottom" I suspect we're still going down a bit more from here. In the long run it will be healthy and we'll move back up unless Trump just does something else stupid, which he probably will.

I agree. It definitely doesn't feel like a "controlled" correction. I fully expect more economic/market sabotage by the Stooge.

 

[AZCB34]

I don't know who originally put this together and I didn't verify the numbers:

"What are the hallmarks of an A+ in the economy:

• The trade deficit is up 14% since Trump began his trade wars.
  
  The DOW and the S&P YTD is around 1%, the 3rd worst year since the Great Recession. Right now an equities investor would get a better return for 2018 YTD if they had bought T-bills.
  
  2017 saw the fewest new jobs added since 2010 and 2018 is creating even fewer new private sector jobs (Dep. of Labor Statistics).
  
  The annual budget deficit is the highest it has been in 6 years, and is still growing (The Office of Management and Budget).
  
  The national debt rose more than $1.2 trillion in the fiscal year that just concluded on Sept. 30. (The Office of Management and Budget).
  
  New 1 family home sales are down 23% from November 2017 and down 10% from Trump's inauguration (Federal Reserve Bank of St. Louis).
  
  People are defaulting on their credit card payments at the highest rate since the Great Recession (Federal Reserve Bank of St. Louis- FRED).
  
  The average price for a gallon of gas is up 17% (AAA).
  
  The GDP which hit 4.2% 2 quarters ago only fell 18% last quarter (FRED). By comparison under Bill Clinton the U.S. economy expanded at an average annual pace of 4.3 percent for five years, from 1996 through 2000. In the 1980s, growth averaged 4.6 percent annually from 1983 through 1987."
  
  Trump thinks if he keeps telling people its great, they will believe him. Its a typical used car salesman carnival barker type of sales job. No doubt after Obama pulled us out of the recession, Trump got to ride a tide for awhile, but the overall picture since he took office is not so impressive.

 

[Russ Smith]

I don't know who originally put this together and I didn't verify the numbers:

"What are the hallmarks of an A+ in the economy:

• The trade deficit is up 14% since Trump began his trade wars.
  
  The DOW and the S&P YTD is around 1%, the 3rd worst year since the Great Recession. Right now an equities investor would get a better return for 2018 YTD if they had bought T-bills.
  
  2017 saw the fewest new jobs added since 2010 and 2018 is creating even fewer new private sector jobs (Dep. of Labor Statistics).
  
  The annual budget deficit is the highest it has been in 6 years, and is still growing (The Office of Management and Budget).
  
  The national debt rose more than $1.2 trillion in the fiscal year that just concluded on Sept. 30. (The Office of Management and Budget).
  
  New 1 family home sales are down 23% from November 2017 and down 10% from Trump's inauguration (Federal Reserve Bank of St. Louis).
  
  People are defaulting on their credit card payments at the highest rate since the Great Recession (Federal Reserve Bank of St. Louis- FRED).
  
  The average price for a gallon of gas is up 17% (AAA).
  
  The GDP which hit 4.2% 2 quarters ago only fell 18% last quarter (FRED). By comparison under Bill Clinton the U.S. economy expanded at an average annual pace of 4.3 percent for five years, from 1996 through 2000. In the 1980s, growth averaged 4.6 percent annually from 1983 through 1987."
  
  Trump thinks if he keeps telling people its great, they will believe him. Its a typical used car salesman carnival barker type of sales job. No doubt after Obama pulled us out of the recession, Trump got to ride a tide for awhile, but the overall picture since he took office is not so impressive.

Yep there are lots of actual statistics that prove he's lying through his stupid hair when he says that stuff but his based just keeps believing it.

I know people I went to school with who are still blaming Obama for their inability to get a job or being under employed. Price of gas it's the Dems fault. Inflation at the grocery store, that's the Dems fault.

 

[Zeno]

The market was awful today, I thought yesterday was the start of a new upswing but obviously not. Ugh.

I don't have the biggest portfolio but I have lost about $25K since the end of September and that hurts.

 

[AZCB34]

I believe the markets are dealing with the following which is causing volatility:

1. Boy who cried wolf aka the lying president - Can't keep promising things like tax cuts and deals with China and not deliver.

2. Overheated market - It was due for a correction anyways.

3. Employment - Nothing huge but GM and now Ford are talking layoffs. Who might be next? This leads to...

4. Tariffs/Holiday Retail/Earnings - Nuff said

5. Government Shutdown - Don't discount this as well because the only reason we aren't doomsday prepping for a shutdown is 41.

Market seems to be playing wait and see which means uncertainty and if there is one thing the markets hate it is uncertainty.

Just my .01 (I had .02 but the markets haven't been kind).

 

[Kel Varnsen]

.

Just my .01 (I had .02 but the markets haven't been kind).

Lol

 

[Russ Smith]

I believe the markets are dealing with the following which is causing volatility:

1. Boy who cried wolf aka the lying president - Can't keep promising things like tax cuts and deals with China and not deliver.

2. Overheated market - It was due for a correction anyways.

3. Employment - Nothing huge but GM and now Ford are talking layoffs. Who might be next? This leads to...

4. Tariffs/Holiday Retail/Earnings - Nuff said

5. Government Shutdown - Don't discount this as well because the only reason we aren't doomsday prepping for a shutdown is 41.

Market seems to be playing wait and see which means uncertainty and if there is one thing the markets hate it is uncertainty.

Just my .01 (I had .02 but the markets haven't been kind).

Yep. I think the main 2 yesterday was Trump tweeting that "I"m a tariffs man" and the yield curve stuff. I don't understand all that yield curve stuff but apparently it was a very big deal, it "inverted" yesterday which is apparently a huge red flag signal for recession. Add in Trump threatening China again saying if 90 days passes and nothing is done, I'm a tariffs man, just killed the markets.

He's lucky today the markets are closed in rememberance of Bush Sr, he gets a 1 day cooling off I think we'd have gone lower for sure