The year 2018 was the worst for stocks in 10 years. Dropping 20% in quarter 4 and 6% for the year. Optimistic White House comments about a trade agreement with China were a reason the market climbed the first four months of 2019. But the White House hasn’t been truthful.
The tariff war is off the rails. The market is tumbling down again. Aug. 14 was the worst day for the market in 2019, dropping 800 points. The yield curve has been inverted since last December. And signals of approaching recession are apparent.
Increasing the tariff rate from 10% to 25% on about $176 billion of Chinese imports amounts to a $1 billion tax increase. Now there is talk of increasing tariffs to 30%. While the top 1% has been insulated by tax cuts, the American middle class is bearing the brunt of President Trump’s disastrous trade policy.
Polls on approval of Trump’s handling of the economy say that approval has dropped 11 points since the third quarter of 2018. Still, 47% of those polled currently approve. But I just don’t know how. Clearly, 39% of Americans approve of all things Trump. But the remaining 8%? How does one approve of chaos?