Just days after raising tariffs on some Chinese goods, President Trump insisted during a brief chat with a group of reporters in the Oval Office that the stock market would be trading at all-time highs well above any previous level – and that the Dow would be 10,000 points higher – if only he had not decided to press on with the trade war against China.
However, Trump insisted that “somebody had to do this” and there would be long term benefits to the economy from stopping China from taking advantage of the US on trade.
— Bloomberg TV (@BloombergTV) September 4, 2019
Here’s what he said.
“Let me tell you, if I wanted to do nothing with China, my stock market, our stock market, would be 10,000 points higher than it is right now. But somebody had to do this. To me, this is much more important than the economy,” Trump said. “It was out of control and they were out of control.”
Though the conclusion of trade tensions would likely send the market higher, it has held up surprisingly well considering that odds for a swift resolution to the trade conflict have fallen off a cliff as of late.
It almost seems as if the market has moved on to caring about something else…perhaps the Fed?
Then again, if stocks were to price in the 100bp-plus of rate-cuts that money markets are pricing in…then the Dow really could be 10,000 points higher.
Perhaps that’s why Trump keeps hammering at Powell?