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Monday, April 9, 2018

A roller coaster in Wall Street called Donald Trump

Por qubano22005

The Wall Street stock market has shown some signs of recovery after the heated spirits of investors have calmed down at recognizing optimism in the trade dispute that is happening between the two super economic powers, the United States and China. Some think that Donald Trump and his Chinese homologue will be able to find a solution to their differences through diplomatic channels and avoid a global economic collapse. According to reports from the stock market, in contrast with what usually happens, technological, banking and retail roles led the advances. The yield on the 10-year Treasury note rose to 2.82%, from 2.81%.

However, Wall Street throughout this week has been a continuous oscillation that would make dizzy the most experienced of the sailors with the constant rise and fall of the tide of prices and financial indexes that has crept more than one investor. Clearly the most important stock market in the world is definitely not suitable for cardiac patients and with the new administration it is better to have a medical backup since with Trumps’ outrages you never know what course the market will take and neither what size the wave will have.

Ironically, several shareholders and Wall Street members thought that the period of enlarging their coffers would come with Trump, a businessman known for his entrepreneurial spirit and great skills to make fruitful business in his favor. However, despite this reality is indisputable so is the fact that the president is a neophyte in matters of foreign policy and, although he does not know it, national economies depend on a large extent of correct political decisions.

On this occasion, the crusade undertaken from Washington to Beijing is the most palpable sign of Trump’s ignorance on foreign policy and in economic matters. Trump, when signing the new tariffs on steel and aluminum, thought only of executing an action against China, ignoring the economies of its allies; that was one of the mistakes he made. The measure had repercussions not only on the steel and aluminum markets but also on other industries associated precisely with these resources. In addition, its allies were seriously affected in prices, so Wall Street panicked and this was reflected in the values ​​of these raw materials.

During this week the rhetoric between the most powerful nations of the world economy and the crossfire of tariffs and threats of new ones, caused the Dow Jones industrial average to fall by 501 points. But, apparently, the Chinese diplomacy and the calm messages sent by the Asian country contributed to a recovery in spades in the same day. However, Wall Street analysts continue having a nightmare called Trump, since the constant fluctuations of the market, caused by the bad political decisions of the president, will seriously affect the confidence of businessmen and consumers. This can contract the growth of the different indices. Currently, the most worrisome are the technological indicators because the United States has clearly mentioned that its campaign against Beijing is aimed precisely at dynamiting the Chinese development of this sector. The thing Trump does not know or perhaps does not want to be aware of is that China leads several branches of the technology sector and is the world's greatest manufacturer of the electronic components of this industry.

The Institute for Supply Management conducted a survey that revealed the wide negative repercussions everywhere due to Trump's controversial measures, decisions and criteria. Trumo is its main spokesperson (via Twitter) and never perceives the risks of not connecting brain and fingers (because he faster than he thinks). Categorically it could be said that Trump is taking his country to economically commit suicide, not only because of his war against China, but against businessmen of his own nation.

Just to mention, the aggressive tariffs against Beijing while they can please their followers, will also end with the American industries and with vital sectors such as agriculture. The real estate business, to which he belongs, could even also decline. Some party members have tried to appease the sentiments of senators and businessmen by commenting that some tariffs will not apply if China reduces barriers to US products, although several analysts consider it improbable.

In addition to the trade war with China, the fact that several members of his cabinet are big investors has also caused more than a stir on Wall Street. Rex Tillerson, The ex-Secretary of State and former CEO of Exxon; and Gary Cohn, former president of Goldman Sachs, have also suffered affectations in the stock market. On the other hand, Trump’s attacks on Amazon besides harming the technological giant and the pockets of Jeff Bezos, have deteriorated the finances of the US Postal Service. Amazon has lost almost 14% of its value since the US president’s onslaught.

Analysts point out that these swings could have a negative repercussion on the current midterm elections, in which the Republican Party longs to retain the Congress’ control, an unpromising issue if the economy declines and the American population is affected. However, Press Secretary Sarah Huckabee Sanders, in order to calm the situation and the discontent of investors, has said that in the short term there may be some pain but there will certainly be success in the long one.

A diferencia de otros mandatarios Trump referencia Wall Street como signo de los avances de su mandato y como prueba irrefutable de sus transformaciones. Sin embargo, en los últimos días su cuenta de twitter ha estado bastante silenciada sobre el asunto, aunque Sarah Huckabee ha respondido que está bastante relajado. Habrá que esperar el comportamiento de los indicadores del mercado de valores newyorkino para saber si detrás del diluvio aparecerá el arcoíris. Mientras accionistas e inversores abrochan los cinturones de la montaña rusa en que se ha convertido Wall Street.

Unlike other leaders, Trump references Wall Street as a sign of the progress of his administration and as irrefutable proof of his transformations. However, over the last few days his Twitter account has been quite silenced on the matter, although Sarah Huckabee has replied that he is quite relaxed. We will have to wait for the performance of the indicators of the New York’s stock market to know if the rainbow will appear after the deluge. Meanwhile, shareholders and investors fasten the belts of the roller coaster Wall Street has become in.