Missing Santa? ‘Tariff Man’ Might Have to Share the Blame



Santa Claus rally

Equity markets tend to see a rally at the end of the year. The phenomenon is known as a “Santa Claus rally.” However, what we had last week was a deepening sell-off. The Dow Jones Industrial Average had its worst week in a decade, while the NASDAQ entered bear territory. The S&P 500 (SPY) is also deep in the red.

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US stocks seem headed for the worst fourth quarter since 2008. In September, days before the fourth quarter started, President Trump touted the US markets’ outperformance compared to China’s markets. President Trump tweeted that while US equity markets are “surging,” Chinese equity markets are “collapsing.” To learn more, read Some of President Trump’s Misfired Tweets. President Trump has targeted several companies including Ford (F), General Motors (GM), Apple (AAPL), and Amazon (AMZN) in his tweets.

In December, President Trump tweeted that he is a “Tariff Man.” US equity markets fell sharply after the tweet. The tweet was a few days after President Trump met President Jinping at the G20 summit in Argentina. The two leaders agreed to a 90-day truce.

While there are several factors to blame for the recent sell-off in the markets, President Trump might be responsible for some of the blame, which we’ll discuss in the next part.


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