26 Aug President Trump Rocks the Markets
President Trump put the markets in turmoil over the weekend after he Tweeted regrets of getting into a trade war with China. However, his words were quickly retracted by his administration as they came out with a correction stating that he regrets not setting tariffs against China higher. What? Did this really happen? Super strange for a President to have his words corrected. This shows the power President Trump’s Tweets have on the market. I can only imagine the ruckus this created in the back rooms of the White House as his administration decided how to handle the backlash of the President’s statement. Fortunately for the markets, his statement was corrected quickly, for such words would likely cause stocks to turn massively higher, and the President’s word lose power among the Chinese negotiators who are looking for ways to take the upper hand in the trade battle.
After hitting the bottom of the stock market’s trading range, stocks have bounced higher in early morning trading. However, stocks are responding to trade war news, which isn’t a realistic picture of the strength of US companies. Since the trade war news moves with the flow of Tweets from our President, the risk of the true value of stocks is unknown, the investment in the US stock market is high. We are seeing such extreme volatility; it just isn’t safe to plan on short term returns. Unless you are watching the markets closely, or just investing on a daily trading basis, stocks are very risky in the near term.
Mortgage bonds are near flat for the day. Floating on loans that need to close in the near term is risky. However, I continue to see lower rates in the longer term.