Trump once boasted of market gains, now tweets cause drops

Trump once boasted of market gains, now tweets cause drops

The year started with President Donald Trump promising big growth for stocks.

In January, he shared excitement over a “big day” on Wall Street. By June, the president was tweeting: “Stock Market up almost 40% since the Election.” When the market hit a record high on Aug. 25, Trump tweeted, “Congratulations U.S.A.!” And there was more excitement on Oct. 3: “The Stock Market just reached an All-Time High during my Administration for the 102nd Time, a presidential record, by far, for less than two years.”

Now, as those gains are wiped away, the president is attacking the Federal Reserve for the stock market’s woes — and those tweets are pushing share prices even lower.

On Monday, stocks slid an additional 2 to 3 per cent after another Trump tweet-attack on the Fed and an effort by his Treasury secretary to calm investors’ fears that only seemed to make matters worse.

The market is now on track for its worst year since 2008 and its worst December since 1931, during the depths of the Great Depression.

The market has been roiled for most of the month over concerns about a slowing global economy, the escalating trade dispute with China and another interest rate increase by the Federal Reserve.

The past two trading days, however, have been dominated by something else: major losses following tweets from the president criticizing Fed Chairman Jerome Powell and the central bank.

Trump’s Monday morning tweet heightened fears about the economy being destabilized by a president who wants control over the Fed.

“The only problem our economy has is the Fed,” the president tweeted. “They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch — he can’t putt!”

Peter Conti-Brown, a financial historian at the Wharton School of the University of Pennsylvania, said: “We’ve never seen anything like this full-blown and full-frontal assault. This is a disaster for the Fed, a disaster for the president and a disaster for the economy.”

Treasury Secretary Steven Mnuchin made a round of calls to the heads of the nation’s six largest banks Sunday and said they assured him they have ample money to finance their normal operations. It was an attempt to calm jitters, but it only raised new concerns about the economy.

Most economists expect growth to slow in 2019, not slide into a full-blown recession. In fact, many economic barometers still look encouraging. Unemployment is at 3.7 per cent, the lowest since 1969. Inflation is tame. Pay growth has picked up. Consumers boosted their spending this holiday season.

Fed board members are nominated by the president, but they’ve historically made decisions independent of the White House. Trump nominated Powell last year to become chairman.

But the president has voiced his anger over the Fed’s decision to raise its key short-term rate four times in 2018. Those measures are intended to prevent the economy from overheating.

Trump’s latest remarks only created more uncertainty for already unnerved investors who have seen all of this year’s stock market gains evaporate.

“Now we’re having a correction and we’re down for the year, so the narrative people get drawn to is that perhaps his more unpredictable policies are bad for the market,” said Craig Birk, chief investment officer at Personal Capital. “The separation between the president and the Fed, maybe just causes a little more concern than it would have a few months ago.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta Chief Medical Officer of Health Dr. Deena Hinshaw reported 456 new cases of COVID-19 over the past 24 hours. (photography by Chris Schwarz/Government of Alberta)
Five new COVID-19 deaths in Central zone, two in Red Deer

Province reports 456 new cases of COVID-19

Community Futures Central Alberta, in partnership with the Central Alberta Regional Innovation Network (CARIN), is behind the SMARTstart initiative for budding entrepreneurs.
New program aimed at helping entrepreneurs succeed

Program offers mentorship, business advice and networking opportunities

A Red Deer man, who has been declared a dangerous offender, lost his appeal of an aggravated assault conviction from 2017. Advocate file photo
Red Deer man who chomped on remand centre inmate’s ear loses aggravated assault appeal

Inmate lost part of his ear in attack at Red Deer Remand Centre in August 2017

Red Deer’s Wiklund vs. Wiklund is celebrating a burst of songwriting creativity during the 2020 lockdown by releasing a new tune to YouTube and multiple digital music platforms in each month of 2021. (Contributed image).
Pandemic lockdown fuels a flurry of songwriting for Red Deer music duo

Wiklund vs Wiklund will release a new single monthly in 2021

Red Deer's Tammy Cunnington picked up a gold medal in the S4 women's 50 metre backstroke at the Pan Pacific Para-Swimming Championships in Cairns, Austraila. (Photo Courtesy of Brian Cassey Cairns 2018 Pan Pacific Para-Swimming Championships/ Swimming Canada)
Red Deer’s Tammy Cunnington eyes trip to 2021 Paralympic Games

“It would be just that last icing on the cake of my journey.”

Justin Kripps of Summerland and his team have competed in Olympic action and World Cup competitions in bobsleigh. (Jason Ransom-Canadian Olympic Comittee).
QUIZ: Are you ready for some winter sports?

It’s cold outside, but there are plenty of recreation opportunities in the winter months

A medical team of the new Nurse Isabel Zendal Hospital apply a fiberoptic bronchoscopy to a patient inside a COVID-19 ICU in Madrid, Spain, Monday, Jan. 18, 2021. As the coronavirus curve of contagion turned increasingly vertical after Christmas and New Year's, the Zendal has been busy. On Monday, 392 virus patients were being treated, more than in any other hospital in the Madrid region. (AP Photo/Bernat Armangue)
Panel: China, WHO should have acted quicker to stop pandemic

GENEVA — A panel of experts commissioned by the World Health Organization… Continue reading

File photo
Wetaskiwin Crime Reduction Unit recovers valuable stolen property

Property valued at over $50,000 recovered by Wetaskiwin Crime Reduction Unit.

Karina Gould, Minister of International Development, holds a news conference on Parliament Hill in Ottawa on Thursday, Dec. 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
COVID-19 vaccines: Canadians torn between helping the world and helping themselves

MONTREAL — The COVID-19 vaccine rollout is highlighting the disconnect between the… Continue reading

A worker installs flags on Pennsylvania Avenue in front of the White House ahead of President-elect Joe Biden’s inauguration ceremony, Tuesday, Jan. 19, 2021, in Washington. THE CANADIAN PRESS/AP/David Phillip
‘Very mesmerizing’: Canadians eye Biden inauguration with relief, anxiety

Katie Thompson noticed a pattern emerging with appointments made at her chiropractic… Continue reading

Parliamentary interpreter Nicole Gagnon poses for a photo on Parliament Hill, Tuesday January 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Parliamentary hearings over Zoom an ongoing headache for translators

OTTAWA — Each day, translator Nicole Gagnon wakes up and heads to… Continue reading

People lineup at a hotel for the homeless before the 8 p.m. COVID-19 curfew on Jan. 11, 2021, in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Montreal mayor wants homeless exempted from curfew in wake of Innu man’s death

Montreal’s mayor is calling on the provincial government to exempt homeless people… Continue reading

Conservative MP Derek Sloan arrives at West Block Thursday December 3, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Tories unsettled over whether ends justifies the means in ouster of Derek Sloan

OTTAWA — Efforts to oust controversial Conservative MP Derek Sloan from the… Continue reading

Prime Minister Justin Trudeau listens to a question as he participates in a news conference at Rideau Cottage in Ottawa, Tuesday, Jan. 19, 2021. THE CANADIAN PRESS/Adrian Wyld
No Pfizer-BioNTech vaccine doses to be shipped to Canada next week: Fortin

OTTAWA — Canada is not going to get any vaccine does from… Continue reading

Most Read