President Donald Trump releases the presidential limousine before leaving Washington in the campaign campaign at Joint Base Andrews in Maryland, November 5, 2018.
Carlos Barria | Reuters
Two major priorities of President Donald Trump – a strong stock market and a tough trade deal with China – are likely. Trouble is frustrating on Wall Street as it tries to target a moving price to a particular outcome.
Entrepreneurs are hanging on every word of the president seeking a easing in his rhetoric and a potential softening in the continuing trade war.
If tweets are any indication, the focus of the president changes. In the past two weeks, his Twitter mentions related trade terms has double his mention of the economy and stocks.
Every year, Trump tweeted about seven times a week on Chinese topics, commodities and tariffs – the same average frequency for jobs, stocks and economics. During the week of May 5, though, his China and trade mentions rose nearly 46 times, as he mentioned phrases related to the economy about 17 times, according to his Twitter feed analysis. There are some overlaps, because sometimes he has bundled a lot of topics on the same tweet.
"Tariff Man," as once described by Trump himself, won the battle of presidential personalities, and the "Dow Man" had to take a back seat for a moment.
& # 39; Impossible & # 39;
Wall Street analysts see the job of guessing the president's mindset day by day for clients to be a tough task.
"Impossible – the risk of reward here is almost entirely at the discretion of President Trump," says analyst Raymond James Washington, Ed Mills. "You do not know exactly what his goals are."
On the one hand, Trump is appealing to its base with a firm standpoint in the trade before the 2020 elections. But economists say that trade is lesser between the world's largest economy that threatens growth cooling , at least in the near term.
It has a toll on the expected growth of the world and is therefore the stock market. The Dow Jones Industrial Average – Trump's go-to-report card for a strong economy – dropped 600 points Monday following new rounds of retaliatory tariffs. It rallied Tuesday on more business hopes and relocated on Wednesday. In general, the Dow dropped by more than 3% because Trump had grown into trade war 10 days ago by tweeting a threat to raise tariffs in China, which he followed through on Friday .
"The problem is that the president has two opposing polls here," strategist of Fundstrat Washington strategist Thomas Block told CNBC. "He clearly watched the Dow and some friends who probably called him and said, 'Donald, we're dead' – so it's a part of Donald Trump. But there's also a party political. "
The political party increases tariffs from 10% to 25% to $ 200 billion in Chinese imports. U.S. also retrieves the necessary legal steps to beat another round of 25% tariff on $ 300 billion import, which will take place in June at the earliest. The blocking is highlighted uncertainty which he said leads him to tell clients to "stay on the sidelines."
"If I felt that I understood Donald Trump's mind better than others and had a high level of confidence about the outcome, to pay me more money than they could afford," said by Block.
Block said that his natural tendency was "a kind of agreement" to be done at a June G-20 meeting. But he said Trump's priorities, and therefore public stance, could change the last minute.
& # 39; Turn on a coin & # 39;
Isaac Boltansky, director of research policy for Compass Point Research and Trading, also travels in this dynamic market. He said clients are "aware of the fact that this statement may open a coin."
"The near term sentiment sentiment is undeniably warranted given recent developments, but investors recognize that the president may change the market's feelings in a single" Boltansky says.
Trump launched the person "Tariff Man" in a tweet in early December, one month saw S & P 500 drop by 9.2% in the lowest month since the financial crisis.
But the strategy is played on its base and part of the campaign strategy that reaches 2020. Trump also uses standpoint as ammo against the Democratic candidate and former President Joe Biden, who supported the Trans-Pacific Partnership.
"Tariffs are based specifically on the Trump electoral map, especially the farm states," says Dan Clifton, a partner and policy research leader for Strategas Research Partners. "At the same time, Trump can make a convincing case that Biden is weak in China, and a standoff in China benefits in its re-election."
China responds to US tariffs on its own foot to $ 60 billion worth of US goods. That's the peasants in "every angle," according to an economist at the American Farm Bureau Federation. To counter the impact of Beijing's retaliatory duties, Trump said this week that farmers will receive around $ 15 billion in aid. His campaign is a forecast that farmers will help Trump despite the loss of American agriculture.
"The deal with China to end their bad behavior will provide more lasting economic benefits," said Tim Murtaugh, the communications communication of Trump's campaign, on CNBC. "The peasants are patriotic and understand that someone has finally called China into account."
Murtaugh said in a booming economy, another rallying point before 2020. Growth of GDP in the first quarter grew by 3.2% – its best start a year since 2015. In April, unemployment has dropped to its lowest level since 1969.
10% drop before he changed the tune
But changes in trade winds threaten that boom, according to multiple economists. An estimate from Oxford Economics puts a loss on every household around $ 500 at the current tariff level. If the White House is adding tariffs to all Chinese imports, the U.S. economy will be about $ 100 billion smaller by 2020, translating into $ 800 loss per household.
"US officials are ready to accept some illness because they believe that the disease imposed in China will be bigger than the U.S. and forced China back to the negotiating table," Clifton said. "The key is how it affects the economy."
Raymond James Ed Mills said stocks still have space to fall before Trump eases rhetoric in the deal. Experiments should undergo correction at least 10% "before Trump starts negotiating prospects of a G-20 timing agreement," Mills says. Trump and his Chinese counterpart, Xi Jinping, are expected to meet the G-20 summit next month.
"China has made a decision to calculate that there is so much pain that the Trump administration is ready to take from the equity markets before it changes in its tune," Mills says.
According to former Chief Chancellor Steve Bannon, the Trump fold opportunity is slim. In a CNBC interview Wednesday, Bannon said no "opportunity" would be returned by the president in a global standoff.
"It's easier for him to sign a deal where they buy more soybeans and the cheerleaders on Wall Street say it's awful, and the stock market up for a moment," Bannon said. CNBC's "Squawk Box" Wednesday. "Reducing the core of what will be the United States in the future."
– CNBC's Brian Schwartz Jeff Cox and Fred Imbert contributed the report.