S&P 500 Hits a Record
After a bit of a Trump-induced detour.
Via the NYT: S&P 500 Surges Through Trump Turmoil to a Record High.
The rally began on April 9, when Mr. Trump delayed his administration’s steepest tariffs until July. Since then, the S&P 500 has risen more than 23 percent, despite continued challenges like inflation and a war in the Middle East.
This just underscores what I have repeatedly noted: investors don’t like his tariffs, and the markets keep demonstrating this fact.
It seems noteworthy to note the trendline coming into the administration and that the dip on the graph was due to turmoil created by Trump’s various tariff threats.
I suppose the question now is, will he reengage in his mercurial approach to tariff policy, or will he just let it ride?
I will note that there has not been the promised cavalcade of deals. On that topic, see Reason: 90 Deals in 90 Days? Trump’s Trade War Is Failing on Its Own Terms.
“We’re going to run 90 deals in 90 days,” Peter Navarro, the White House’s top trade advisor, told Fox Business on April 12, shortly after Trump paused those tariffs—ostensibly to allow negotiations to take place.
It’s been 76 days since then, and there have not been 76 new trade deals. Not even close. The actual tally is two, and that’s only if you count the “framework” deals with China and the United Kingdom—neither of which amounts to a full trade deal at the moment.
On Thursday, the Trump administration officially backed down from the “90 deals in 90 days” posturing. Press secretary Karoline Leavitt told reporters that the early July deadline for re-implementing those paused tariffs was “not critical.” Whether the paused “Liberation Day” tariffs return in early July is “a decision for the president to make,” she added.
For the record, I do not count the frameworks as actual “deals.”
For those who are interested, the Atlantic Council has a Trump Tariff Tracker. Note that the kinds of products (i.e., tech) that make up the bulk of growth in the S&P Index are exempted from Trump’s tariffs.
None of this is any way to run economic policy.
I would say “the rich get richer”… But I think that chart needs to be augmented with an additional variable: The decline of the value of the dollar.
Is the S&P really moving up in the Trump timeline… or is it more that it is just recognizing that IF the dollar has gone down, then the S&P should go up that same amount?
I’m at the “it’s all a game” stage now, so I don’t follow most of the street talk anymore. That stuff is for the Connors who imagine they be the playahs when in fact they the game.
The market indexes always trend to move upward, overall, simply because with continuing economic growth, both in the US and globally, more money is looking for somewhere for investment with possible returns above just sticking in the bank.
This is not unique to the US.
Look at any major stock investment market since about 2000: London, Paris, Frankfurt, Tokyo etc.
This seems just to be the latest iteration of this trend.
That does not meean the economic fundamentals are necessarily supportive.
See eg the previous examples of major valuation adjustments.
@JohnSF:
I concur, and I certainly wasn’t trying to argue anything about the health of the broader economy.
I am simply noting the effects of tariffs, one way of the other, on this type of metric.
@Steven L. Taylor:
Oh, I agree.
The current recovery is based on a combination of the “investable money” push factor, and the perhaps over-optimistic market view that Trump has walked back from total lunacy on trade policy.
What remains, as of now, of Trump tariffs etc, remains an obvious economic drag-anchor.
However, the question is, where else to park funds, especially if they are in dollars?
Given that, so long as Trump is not going utterly bug-nuts, US stock markets are liable to trend up.
On a rather parochial note, the US/UK “deal” is both unfinalised, and rather, to use a technical term, shite, from the UK pov.
It will be interesting to see what happens when the administration starts negotiating with the EU.
They have a rep for being a bit more hardcore.
The market always dips in May, this year, they bumped it up into April to generate headlines against Trump. But in the end, those pumping the market have to stop and let things correct.
You could see after a couple weeks of Armageddon headlines that things would settle down as the normal bump settled out. They do it again in December. Probably some tax maneuver.
@JKB:
You’re joking, right?
@JKB:
And it had, of course, no connection to likely economic impact of universal 20% average tariifs, or the likely countervailing actions, or the related impact on global dollar liquidity, or the bond markets connected reactions?
In other news, if my Auntie Ethel had wheels, she’d be a bicycle.
“Always dips in May” indeed.
@Steven L. Taylor: That’s the sad thing: No, he isn’t.
ETA: The other sad part is that this is the guy who is always lecturing us about edumedication systems that call for the students to regurgitate the information back instead of thinking independently (and who endlessly recites bon mots from the early 2oth century).
@JKB:
Who is “they”?
Also, are you aware that the anonymous “they” is often just quiet antisemitism, with “they” being The Jews? Obviously, this is not always the case, as I don’t think The Jews care if you go swimming less than an hour after eating, but it is often the case. Often enough that a lot of people’s ears prick up when hearing that “they” are controlling markets.
Also, lizard people? Just The Jews. That disappointed me, as I love the lizard people, and have ever since seeing V as a child.
@Gustopher:
The Illuminati will always outsmart the Lizard Lords, because they know the Earth is not flat but hollow!
Sign up for your Illuminated membership now, applications c/o Soros at Davos.
@Gustopher: “That disappointed me, as I love the lizard people, and have ever since seeing V as a child.”
Careful, your reference to the 1983 miniseries V (with Marc Singer, the lovely but scary Jane Badler, and a pre-horror icon Robert Englund) MIGHT just give Steven a new topic for his Ancient Geeks podcast . . .
I think, but am not sure, that jkb is just joking or lightly trolling in this case. If a market ever did the same thing at the same time every year, people (or modern algorithms) would adjust accordingly until it didn’t keep happening. And he/she knows this perfectly well.
@Winecoff46: It is always a possibility! I did watch it, but don’t remember enough of it to comment, and am not sure I want to subject myself to a re-viewing!
Okay, so the S&P 500 had a whopping 23 percent gain in 2024, rose another 4 percent by the third week of February, and then plunged about 20 percent by the second week of April. And now it’s gone up, up, up above its February high. Although the White House has just backed down from its own July 9 deadline, volatility may continue to be the name of the market game for the foreseeable future.
The words sung by Bobby Sherman come mind… “Lettin’ me know, easy come, easy go.”
@JKB:
“They”? Seriously?
Seek help.